The residential investment market has witnessed the surprising return of investors as reflected in two major sales events -- April's distressed property auction as well as the sales of apartments at the Gasworks development in Ringsend Dublin 4.
Investors accounted for a major portion of the sales at both events and this caused some surprise considering that Central Bank figures had been signalling that investors had seemed to have withdrawn from market.
The Central Bank figures show clearly that this investor activity is still on a relatively low scale.
In the first quarter of this year investors accounted for only 139 mortgages which was only about one third of the number in the same period of 2010 account and they accounted for only 4.3pc of mortgage lending in the early part of this year.
Nevertheless the two recent sell-offs demonstrates that investors who want to snap up bargains are not relying on the banks to provide the funds. Instead they are reaching for the long socks and drawing on their cash resources to finance their deals.
David Browne of HT Meagher O'Reilly says that investors accounted for about one third of the 28 homes which the agency sold at the Gasworks over one weekend in the beginning of May.
Investors were even more dominant at the Allsopspace auction and they were also among the buyers when Irish Nationwide Building society launched the Booterstown Woods apartments in south Dublin earlier in spring.
Capitalising on this investor interest, Gunnes have organised an auction which will also feature investment properties which will take place on June 30 (see page 2 for full details).
But it's not just the hype surrounding auctions which is generating investor interest.
They also appear to enticed by the combination of the keen prices as well as the stabilisation of residential rents in Dublin and some other urban centres.
The latest Daft rental survey shows rents rose by 0.5pc in the first three months of this year after being static all of last year. In some parts of Dublin and Cork they were up as much as 3pc.
While rents have indeed fallen by as much as 25pc below their 2007 peak, they clearly have not fallen as much as house prices which in some cases are down by as much as 60pc.
Ronan Lyons, economist with Daft.ie, says while rents are rising in some urban centres, significant overhang in other areas are pushing down rents.
"What we may be seeing is the emergence of a two-tier rental market, reflecting different levels of property oversupply and different labour market trends," he adds.
Rents in the first quarter fell by between 6pc in Waterford City and 3pc elsewhere in the country.
The total number of properties available to rent nationwide has risen slightly but, at 17,000, is below the 2009 figure of almost 24,000 which indicates that the gap between supply and demand has narrowed by 25pc.
The combination of falling house prices and stabilising or rising rents has helped to improve yields for investors by an average of 70 basis points or 0.7pc over the 12 months to the end of March.
Although the Daft survey seems to suggest that the average national yields are still as unrealistically low as 4pc gross, in fact the investors who are active in the current challenging market are buying at much higher yields, some at over 10pc.
The reason Daft's yields are low is because it is based on asking prices which are still much higher than actual selling prices. This appears to be particularly the case in relation to market segments which are dominated by owner occupiers.
In contrast, in markets where investors dominate, even Daft's yields are much higher. For instance Daft's survey shows much stronger yields in such rental markets as that for one bedroom apartments in West County Dublin where yields are now 7.6pc.
Next strongest are three bedroom homes in Dublin City centre which are yielding 7.4pc. Waterford City is also seeing strong returns with a yield of 7pc for one beds and 6pc for two beds.
But according to David Browne such strong yields are not confined to those areas and they can be achieved even in Dublin 4 where, depending on the blocks and the locations, he believes that yields can be as high as 6-8pc.
The recent investor activity has also seen investors availing of their strong cash positions to take advantage of vendors who are under pressure to reduce their borrowings and sell quickly.
Another characteristic of current investors is that they are not as interested in making a profit from the selling on the properties as were investors during the boom.
According to Ronan O'Driscoll, residential director of Savills, current investors are professionals who are buying for the returns they can achieve.
A number of agents also report that some of the wealthier of these investors are shopping around for apartment blocks in areas where there is strong demand for good rental properties.
The last Budget also reduced purchasing costs for investors by slashing stamp duty which new investors pay from 9pc to 1pc. However, they also face suffered the the universal social charge which adds 7pc to the tax on the profits from rental income.
Another challenge is emigration which reduces rental demand. However this is not as scary in busy urban areas where employment is strong.
This latter trend may encourage investors se willing to tough it out as it suggests that the rental market may have seen the worst.