Block-buying to hit record as investors snap up developments
Funds spend €430m for more than 1,000 homes in three months amid crisis
Funds buying residential properties in blocks is set to reach a record high in 2019 after €430m worth of homes were secured by investors in the first three months of the year.
The practice has been widely criticised for driving up rents and squeezing first-time buyers out of the market.
In the first quarter of the year, 280 units have been sold in blocks in deals worth €88m in Dublin alone, according to a report from property management company Hooke and MacDonald.
In addition a further 775 units have gone sale agreed on deals worth €343m.
Block-buying activity is on course to eclipse the €1.1bn worth of deals completed last year.
The private rental sector accounted for almost a third of all investment in the Dublin property market last year, according to Hooke and MacDonald.
Ires Reit has been the largest block-buyer in Dublin this year, according to the report.
Fianna Fail's finance spokesman Michael McGrath said: "The growing trend of institutional investors snapping up entire residential developments is creating serious difficulties for first-time buyers but also for older people looking to downsize from a larger property.
"The problem is made even more acute because of the lack of residential development in areas where the demand is greatest."
DIT housing lecturer Dr Lorcan Sirr said that it was obvious that investors buying up entire developments saw "long-term value" in doing so.
"It is significantly impacting the housing market in that fewer people will have the opportunity to own their own home, which comes with a range of social benefits," he said. "From a developers point of view its much more attractive to sell the units all in one go thanks to the tacit promotion of the private rental sector by the State."
Sirr also said that developers are now receiving a premium for selling developments all in one go compared to previous times when blocks of homes were sold at a discount.
Elsewhere, the Department of Finance has revealed that real estate investment trusts (Reits) combined paid €12.4m in tax last year.
It was a slight increase on the €11.8m paid in 2017.
Sunday Indo Business