Dublin PRS Market Q1 2022

The residential investment market Q1 2022 report is now available.

Investment in residential assets reached €378m in the first quarter of 2022, equating to 50% of total spend on Irish commercial property.

The strength of the labour market is underpinning demand for residential investment assets. The number of people in employment in Ireland is higher than ever before (2.5m), with a total of 229,100 more in employment at the end of 2021 compared to the end of 2020.

Residential investment activity in the first quarter of the year saw strong demand for student accommodation which accounted for 38% of total spend. Demand for standing stock continues to intensify comprising 77% of transactions in the first quarter. Additionally, 52% of capital invested in residential assets in the first quarter came from European investors while 48% came from the US.

Inflationary pressures across the board, which have escalated as the impact of the Ukrainian war intensifies, will make it more challenging to address the structural problem of the lack of supply. While new completions are expected to be higher in 2022, they will not reach the estimated 35,000 units per annum that are required to meet the current level of demand and to address the structural problem that exists in the market.

Demand for residential assets is expected to continue to dominate investment activity throughout 2022 with demand for existing stock expected to drive yields lower.

Residential Investment Market Q1 2022

Joan Henry, Chief Economist & Head of Research, Knight Frank Ireland

For more information contact our Residential Capital Markets team or our Research team.