News & Research
It was announced in the Budget that the Help-To-Buy (HTB) scheme will be extended for another two years to the end of 2021. As the HTB scheme is a demand-side incentive scheme there were concerns when this scheme was introduced that it would fuel residential property price inflation and do little to help first-time-buyers (FTBs) get on the property ladder. However, based on the experience of the last three years since its inception, the level of FTB new home transactions has increased markedly, with a modest acceleration in the rate of inflation.
This report analyses the recent trends in the Irish rental market. It examines the drivers behind the strong rental growth rates that has been a feature of the Irish market for the past six years that has now resulted in Dublin being the fourth most expensive city for rental accommodation in a survey of 53 cities. The report also takes a close look at the viability of large-scale apartment developments and argues that the presence of institutional investors are critical to the increased supply of apartments in the Irish market.
The current global real estate cycle counts among the longest in recent history, which has now recorded almost a decade of uninterrupted capital value growth in most major markets. Ireland’s recovery started a little later than other countries but its performance has been no less impressive and is now at a similarly mature stage of its cycle. The MSCI all property total return index for Ireland increased slightly from the 6.3% seen at the end of Q3, recording an annual increase of 9.1% in the 12 months to December 2018, leaving the index 26% above previous peak levels. However, the composition of growth is very different from the period leading up to 2008, when the total returns was driven by capital growth, compared to today where the driver of returns are more evenly spread between capital, income and rental growth.
The Irish Economy continued to perform strongly in Q3 2018, with unemployment standing at 5.4% in September, and GDP growth of 6.5% expected in 2018. This positive backdrop has supported the Irish property market, with the IPD Irish All Property Total Return Index now 24% above previous peak levels.
Despite significant conjecture in the lead up to Budget 2019, there is no change to Stamp Duty for the Built-to-Rent sector and there was no change to the Help-to-Buy scheme. The focus of Budget 2019 with respect to the housing market lies very much on the expenditure side, with a raft of spending increases to support social and affordable housing and additional funding for infrastructure spending to service land.
This report looks at trends in the Private Rented Sector (PRS) which is a critical part of the solution to the residential supply problems facing the Irish economy. The report highlights growth in numbers in rental accommodation; a critical shortage of rental properties and increased rents which are expected to curtail once new residential supply approaches underlying levels of demand.
The Irish economy continued to perform strongly in the first half of 2018, which in turn underpinned the Irish commercial and residential property markets. However, close attention will have to be paid on future market return. Returns broadly in line with the growth of the economy are sustainable - growth much higher wll be a cause for concern.