The most recent quarterly rental report released by Daft.ie, on the 1st of May 2019, found only 2700 homes in Ireland were currently available to be rented out
According to the Daft.ie report, those numbers represent the worst drop in the history of Ireland’s housing records. Most alarmingly, the price range of the least available rental units was approximately €337 per month. The national monthly rent during the first quarter of 2019 was about €1,366.
It is important to note that this housing crisis affected families seeking affordable housing options and led to an increase in homeless Irish citizens. Government officials and real estate investors have committed to a course of action in addressing the housing issue facing Dublin and the country.
The Emerging Build to Rent Sector
An increasing demand for housing options has also led to an emerging Build to Rent (BTR) sector in Ireland. BTR development projects differ from traditional complexes as they are owned and managed by professionals and institutional landlords respectively and offer a long-term rental housing option to the people. They often offer tenants a wide range of amenities and can range in price depending on size, location, services and design.
With that being said, BTR has since received its own fair share of criticisms. Some have accused the BTR trend of aggravating the current housing crisis in Dublin by pushing potential homebuyers out of the housing market. However, some are urging that it is vital to consider the contributions the BTR sector has made towards salvaging the housing crisis in Ireland.
Let’s not forget the primary reason behind the current housing crisis in Ireland was a reduction in building during the previous decades and a stagnant rental rate, which has spurred a shortage of housing supply.
A recent report released by Hooke & MacDonald estate agency argues that the existence of institutional investors in the property market, such as those responsible for the construction of BTR projects, are part of the practical reality of apartment construction and that many of the new apartment developments would not have been viable without these large block-buyers.
Part of the Solution to the Housing Crisis
According to the Hooke & MacDonald report, since BTR was introduced into the Irish property market, over 29% of Irish citizens are now able to rent houses without much hassle, especially those living in the main urban areas of the country like Dublin.
And even better, is the fact that 29.5% of the Irish population currently engaging in housing rentals are between the ages of 25-44, representing the work force of the country’s economy – ranked as the highest in the European Union.
With an anticipated rise in population predicted to reach an 89% growth rate in Dublin come 2034, additional pressure will inevitably be placed on the housing sector, BTR can help to alleviate this pressure by increasing the available supply of affordable housing options to the people.
BTR Creates Unique Investment Opportunity
Since the recession, the Irish government has sought to encourage foreign direct investment to boost the Irish economy.
Build to Rent has become a new force to reckon with in the Irish market with foreign investors and high asset developers since expressing interest in funding and investing in the housing scheme, as it promises to become a global game changer.
For Foreign investors, always keen to invest in new promising schemes, BTR has so far proven to yield successful returns. This on its own constitutes an alternative source of revenue to the economy of Ireland.
A Comprehensive Solution to the Housing Crisis
The Build to Rent trend is gaining worldwide recognition and is already strongly rooted in a wide array of markets including the US, where it is currently seen as a popular sector offering a great deal of opportunity towards attracting investors seeking consistent returns on investments and tenants looking for high-quality, affordable housing options.
Perhaps that was the reason why Ronald Quinlan of the Irish Independent recently wrote that, “Around 30pc of the population rents homes and that figure will only get higher as developers favour the build-to-rent model.”
In order for Dublin to tackle the present housing crisis, it would be in the best interest of the government to work together with property developers and continue to support the burgeoning BTR movement in combination with other efforts to provide affordable housing options for all citizens.