The concept of building up, not out – in other words higher-density housing – has finally taken hold in Ireland. In 2019 more apartments than houses were granted planning permission for the first time, a trend that has continued ever since. The problem is few people here can afford to buy them.
High-rise development naturally costs more to build – there are lifts, car parking spaces and fire safety regulations to consider.
The Society of Chartered Surveyors Ireland estimates the cost of delivering high-spec two-bedroom apartments in high-rise developments in urban Dublin is €619,000. That’s way out of the range of most buyers. That’s also why so many of the big apartment schemes are being sold as PRS (private rental sector) investments.
The rental yields on apartments here are strong, particularly in the context of low interest rates. Hence real estate funds have flocked here to avail of strong returns and are driving most of the activity in the market.
An interesting case study is Glenveagh's Marina Village scheme in Greystones, Co Wicklow. The 205 apartments first went on sale in June 2018, with prices cut in September 2020 before eventually being sold this year to German real estate fund Realis for €60 million. It highlights flagging demand for apartments among private buyers.
Minister for Housing Darragh O'Brien says he wants to make home ownership a cornerstone of Government policy, but our direction of travel might well be in the opposite direction: more high density housing, but with lower rates of home ownership.
At the last census the home ownership rate in the Republic was 67.6 per cent, lower than the EU average of 69.2 per cent. It was as high as 79 per cent in the 1990s, but a surge in property values – the period 2008-2012 aside – has changed this.
And the Government’s move to introduce a shared equity scheme and extend the help-to-buy scheme for first-time buyers – which aim to get more people on the property ladder – is unlikely to arrest this slide.
