New research from Knight Frank Ireland has found that Irish Living Sector investment spend year to date has been the second strongest, at 34% of the total €1.4bn transacted.

As larger lot sizes come to the market in the second half of the year, Living Sector investment deals have the potential to reach €800m to €1bn, a 100% increase compared to 2025.

While lot sizes of €50million – €100 million are where the biggest demand falls, larger lot-sizes are trading. Major global players are now active in the Irish Living Sector market, completing transactions in excess of €200m.

Investors have reacted positively to the rent cap reforms and other positive measures around construction viability. Collectively, they bring a positive sentiment to the market.

This is key as Ireland and Dublin in particular, competes with other major European cities to attract investment. The market is now entering a new cycle in living sector investment across Europe with Ireland set to benefit alongside other key cities such as Berlin, Madrid and Copenhagen.

“Trends identified by analysis carried out on the findings from the Knight Frank Active Capital Survey 2026, are clearly emerging in the Irish Living Sector market”, Joan Henry, Chief Economist & Director, Research at Knight Frank Ireland

“Geographically, investors are forecast to converge on markets where liquidity, transparency and repricing have aligned. This geographic focus reflects a broader shift in behaviour. Investors are no longer waiting for a uniform global recovery. Instead, they are prioritizing markets where entry pricing is clearer, and execution risk is lower. Capital is becoming more selective, concentrating in locations where confidence in values, liquidity and exit prospects is highest”, said Henry.

Globally, the Living Sector is expected to be the second most sought after asset class in 2026, with 65% of investors surveyed in Knight Frank’s Global Active Capital Survey planning on targeting this sector.

Living Sector Investment Market H1 2026.

Total investment spend in the first half of the 2026 reached €1.451 billion.

“Residential investment accounted for 34% of spend, €477.8 million, the second highest sector behind industrial which accounted for 38% in H1. One large industrial transaction, the largest on record, drove the scale of spend in that sector in Q2,” Joan Henry, Chief Economist & Director, Research at Knight Frank Ireland.

While the H1 residential investment spend is positive for the sector, sales volumes are still considerably below the 2018-2022 average of €764 million, but with clear evidence of the beginning of a new cycle.

In 2025 there were twelve deals over €1million and only seven transactions above €10 million. In comparison, the peak years of 2018 to 2022 saw on average twenty-five deals per year above €10 million. The expectation at the outset of 2026 was there would be considerably more transactions compared to 2025.

H1 2026 was a stark contrast compared to H1 2025. In the first half of 2025, there were no residential investment deals over €10 million and in the full year there were seven deals over €10 million.

In the first half of 2026, there were six residential investment deals over €10 million and total spend for H1 2026 was only 18% below the full year residential spend for 2025.

“Multifamily was the dominant sub-sector in H1 2026, with 65% of overall living spend. Social, which did not feature in the 2025 deals completed, was 26% of living spend with two portfolios trading. PBSA made up the remaining 9% of spend”, Emma Courtney, Divisional Director, Knight Frank Living Sector Capital Markets.

Signs of yield tightening

Between 2021 and 2024, prime residential investment yields had been trending upwards due to factors such as interest rate changes and regulation uncertainty. 2025 saw yields begin to contract driven by more liquidity and certainty in the market.

“Prime Living Sector yields are currently under 5% trending towards 4.75%, with the potential for yield contraction where a robust reversion exists to capture rental growth leading to stronger returns”, said Courtney.