Property News Sept 2019 – The Business Post

The Property Price Register listed 2,112 new home sales in Dublin in the first six months of 2018 and some 1,733 for the corresponding period this year

By Tina-Marie O’Neill – The Business Post 19th Sept 2019

Despite busy autumnal launch schedules and levelling prices, new homes sales in the Dublin region are down 18 per cent on last year. That, together with the surge of institutional landlords chasing rental yields, means first time buyers and downsizers are being locked out of the market.

According to DNG chief executive, Keith Lowe, the Property Price Register listed 2,112 new home sales in Dublin in the first six months of 2018 and some 1,733 for the corresponding period this year. Nationwide new homes figures are also slightly lower on last year.

He pointed to cuckoo funds moving away from traditional commercial and retail sectors and into the private rental sector where they can expect returns from four to upwards of six or seven per cent for putting the squeeze on the new homes sector.

Paul Grimes, head of REA Grimes, with branches in Dublin and Co Meath, said: “Institutional investors chasing rental yield are changing the new homes landscape, but they are not solely to blame.

“Too high land values, stringent regulations, restrictions and compliance requirements are also putting too much pressure on the smaller, independent builder. The cost of construction and cost of land has to give a return to make a project viable” said Grimes.

“There’s been a call for more homes for the last few years and developers have answered it and are now coming to market in response, but the price point at which those houses will achieve some sort of profit for builders in the area around Dublin is starting to disappear. All of the risk and exposure is taken on by the builder.”

That might explain why, despite a raft of fast-track planning permissions granted by An Bord Pleanala in the past few months, developers are not breaking ground and are perhaps waiting to forward sell their land with full planning permission to the next available cuckoo fund.