Encouraging News For Home Builders 

As we approach the end of another year, one that presented more than a few unanticipated challenges for the industry, there appears to be some encouraging news for home builders. Unfortunately, the same cannot be said for Ireland’s commercial property market, which has seen a decline, with the total investment in 2023 dropping to €1.76 billion. According to agents locally, this is not the whole story. This period has been marked by strategic acquisitions, notably by Pontegadea, the family firm of Zara founder Amancio Ortega. Their purchase of a major logistics investment at Baldonnell Business Park for €225 million points to a continued interest in high-value industrial spaces, especially as this deal represents the largest logistics transaction in Irish history. Another key aspect of this trend is the focus on prime industrial investments. The scarcity in this sector has maintained a healthy demand, as seen in the sale of a data centre in West Dublin and a retail property in Cork. These sales, along with others like the acquisition of the Hexagon portfolio and Marshes shopping centre in Dundalk, demonstrate the resilience of certain market segments, even as overall volumes have decreased.

On the housing front, there is more encouraging news. Despite a rise in construction costs – a near 23 percent increase since 2019 – the housing supply is expected to improve. In the past year, we’ve seen a significant increase in housing completions, which has helped ease housing inflation. Dublin has been at the forefront of this growth, contributing a substantial portion of new dwellings and apartment completions. This momentum is set to continue, with housing starts up by 17 percent compared to 2022, promising a healthy pipeline for 2024. The medium and long-term outlooks are also positive, with a substantial number of housing units granted planning permission, indicating sustained growth in the sector. Of course, it remains to be seen how changes introduced in the new Planning & Development legislation for 2024 will impact planning applications and outcomes.

Interestingly, the mortgage market has shown remarkable resilience. Despite economic uncertainties and rising living costs, mortgage approval values reached €14.7 billion, with nearly 52,000 approvals. This robustness, particularly among first-time buyers, reinforces a strong underlying demand for housing.

As Ireland’s original alternative funder of real estate and construction, we recognise and fully appreciate the scale of the challenges faced by the industry this year; however, experience helps us to see the significant opportunities for strategic investments and growth. The resilience in various market segments and the promising outlook for housing supply and mortgage activity give us reasons to be optimistic about 2024 and it is good to know that home builders within and outside of the Greater Dublin Area appear to share this view. 

Merry Christmas and thank you for your support this year, we look forward to working with you in 2024.

Ian Lawlor
086 3625482

Managing Director 
Lotus Investment Group