The Ireland Residential Investment Market Overview Research Q2 2022 is out now. Download your copy here.
Investor’ spend on residential investment assets reached €811 million in the first half of 2022. €432 million of that transacted in the second quarter, despite increased global economic challenges. 65% of capital spent on residential investment assets has come from Europe year to date while the remaining 35% came from the US. Given recent current movements and EUR/USD parity, increased interest from dollar denominated investors is expected in the second half of the year.
While global debt markets have become more expensive in 2022 with further increases in borrowing costs expected; appetite to lend for the purchase of residential assets is expected to remain competitive. The Irish market continues to be driven by an acute housing shortage at a time when the economy continues to expand, albeit at a lower rate. Gains in employment numbers over the last two years remain a supporting factor, as does the level of export demand.
Inflationary pressures along with debt pricing are however expected to put some upward pressure on yields over the coming quarters. Overall, the residential investment sector of the market is expected to continue to remain very active, with forward commit deals to lead the way (65% of transactions in Q2 were forward commit, compared to 45% year to date).
Joan Henry, Chief Economist & Head of Research, Knight Frank Ireland