Why are investment funds buying up Irish Property?

Large-scale private rented sector (PRS) investors, sometimes called vulture or cuckoo funds, have rapidly become a major force in the Irish property market over the last few years.

As recently as 2017, these funds were a minor and insignificant part of the housing market. However, these firms have spent more than €6 billion buying Irish homes, apartment buildings, and commercial properties over the last three and a half years.

The cuckoo funds show no sign of slowing down in 2021, as they have spent €1.5 billion so far this year, according to recent figures from estate agents and property adviser JLL. Most of these funds are backed by international investors, and have quickly become big players in the market, particularly investing in deals for new apartments in Dublin.

But what is driving this relatively new and rapidly growing force in the market?

Analysts say that an influx of cash in European markets, lack of yields in traditional assets including bonds, and the huge surge in housing demand and high rent prices in Ireland have combined to create a very lucrative …

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Why are house prices surging in Ireland?

House prices in Ireland have surged in the last 12 months. Two separate reports have pointed to a 13 percent increase in house prices over the last twelve months, both in Dublin and nationwide. Property website myhome.ie, which is owned by The Irish Times, pointed to a ‘red hot’ demand outpacing supply as one of the main reasons for this increase in their latest quarterly report. According to MyHome, house prices nationally increased 13 per cent to €303,000 in the second quarter of 2021, breaking the €300,000 mark for the first time in recorded history. In Dublin specifically, they found the average price to be €412,000, representing a 10.6 percent increase on the year. Daft.ie, another property website, reported similar increases in the price of homes on its website, up 13 per cent on the year to €284,000, the highest such increase since 2015.  This increase means house prices have increased for four consecutive quarters, the first time this has happened since 2014.

This substantial increase put house prices nationally 14.3 per cent lower than their highest-ever level in 2007. …

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What will the Local Property Tax changes mean for you?

On 2 June 2021, Finance Minister Paschal Donohoe confirmed the details of the Local Property Tax (LPT) changes. Once the changes go into effect on 1 November, the government estimates that just over a third (36 percent) of property owners will see an increase on their bill, just over half (53 percent) will see no change at all, and 11 percent will see their tax payments reduced.

First off, what is the Local Property Tax? The Local Property Tax was introduced in 2013, and it is an annual charge on all residential properties in the State. Basically, if you own a residential property, you will have to pay this tax. The charges are currently based on self-assessed valuations carried out in 2013. The amount you pay is based on the valuation of your property, and there are 20 different LPT bands, with the lowest two having fixed rate charges of €90 and €225. The problem with these valuations is that property prices have surged since 2013, while the valuations of property for LPT purposes have not changed since 1 May 2013. …

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More families unable to afford homes in Dublin

The Dublin City Councillors agreed to tightly restrict eligibility to qualify for the affordable housing scheme. Thus, fewer families will be able to buy social housing in Dublin.

The Dublin City Council is seeking developers for 400 new homes on three different sites. These homes will be offered for sale to qualifying low and middle income workers. The starting price will be from $116,000. New apartments and homes amounting to 370 new units in Ballyum and Ballyfermont will be the first of several thousand affordable homes in all of Dublin, Fingal and Dun Laoghaire.  The scheme of priority has been approved by councillors by the four local authorities. The scheme determines how prospective buyers will be chosen.

Priority applicants have been defined as those living in the council area for at least 12 month will be the first to chose the newly available homes. The remaining homes will be offered to applicants with children in education in a set distance of the property. Any remaining homes will then be available to those who have a household member with a job …

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Irish Housing Market Trends

Ireland has seen a hit take place in recent years as property market seems to be downsizing. Families, with two full-time working partners, are finding it difficult to afford houses at their current increasing costs.

It has even been reported by Mark Keenan, a writer for business property and mortgages that working families are struggling to rent as well.

The average working couple in Ireland is earning a combined income of 70,000 euros. This is far below what a couple needs to earn to afford a home today.

It is reported that the average home in Dublin is now priced at mid 400,000 levels. Much more than what the average working couple could afford.

In just the last three months, there has been a multiple week increase to sell a home in Dublin. The housing market is slowing down and it’s slowing down fast.

Why is it that homes are being put on the market for such high prices? It could be that those selling the homes are finding it hard to sell for less …

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