Ireland has experienced a housing crisis that has threatened to upend the economic progress the country has made in the last decade.
The current housing crisis could have lasting effects on the economy and social fabric of the country.
Developers, consumers and government officials were given a sliver of hope recently when the Central Statistics Office released findings that revealed housing prices may be stabilising across Ireland. David Grin, chairman of Dublin-based property financing and investment management firm Lotus Investment Group, explained that “property price stability is better for both the developer and the consumer.”
Ireland in the Grips of a Housing Crisis
For decades, the abundant supply of housing in Ireland has served as the foundation of the country’s economic stability and shaped the government’s social policies. Homeownership has long been the standard in Ireland, with the country once enjoying the highest levels of homeownership in the world.
The Irish economy was dealt a heavy blow during the global recession in 2008. During this period, real estate prices collapsed and many defaulted on their home loans. Homeownership fell from over 80 percent to below 70 percent. In addition, the number of households renting privately owned homes nearly doubled to around 20%.
During this time, construction and homebuilding ground to a halt and has since been slow to recover to pre-recession levels due to several David Grin More helpful hints factors including the increasing cost of construction. This has led to a general shortage of available housing, which has contributed to a sharp increase in the cost of housing.
As a way to tackle the housing crisis and to jumpstart homebuilding, the Irish government launched a Rebuilding Ireland action plan that set ambitious targets to double the annual level of residential construction to 25,000 homes and to deliver 47,000 units of social housing by 2021. That goal has yet to be achieved and the effects of the housing crisis continue to plague the Irish economy and society.
Soaring Housing Costs
Strict Central Bank lending rules that were established to promote economic stability after the recession have compounded the difficulties faced by potential first time home buyers. The regulations cap mortgage loans at about 3.5 times the buyer’s annual income. With median home prices close to 5.6 times the average wage-earning of Irish citizens, this has effectively locked many out of the home buying market and young adults have been especially hard hit by the continuing housing crisis.
Without being able to qualify for a mortgage, many have turned to long term renting as a housing solution. A rise in demand for rental units has created a shortage of supply, fuelling a surge in rental prices across the country, most notably in urban areas. Dublin is now one of the world’s ten most expensive places to live.
According to the latest report issued by Daft.ie, the average rent in Dublin is now at €2,002, up 6.8% compared to the same time last year – marking the 31st consecutive quarter in a row with rent increases recorded in the capital. In addition, the number of units currently available to rent nationwide on 1 May dropped to 2,700 homes – the lowest recorded since 2006.
Forced to spend a large portion of income on rent, many are unable to save for a mortgage David Grin Have a peek at this website down payment to purchase a home in the future. In a cruel bit of irony, it now costs more to rent than to make monthly mortgage payments on average in most locations across Ireland. Daft.ie reported that a mortgage payment for a typical two-bedroom home in the city of Cork would cost an estimated €632 a month, while rental costs for the same property would likely be more than €1,100 a month.
A Surge in Homelessness Figures Nationwide
Those unable to pay these soaring rents face the very real possibility of eviction. Rising housing prices and a surge in evictions have led to a steady, sharp increase in homelessness since 2014. According to Focus Ireland, a non-profit organization working to prevent people from becoming, remaining or returning to homelessness, there were over 10,000 individuals reportedly homeless in June 2019. This figure includes over 3,600 children. Child homelessness in Ireland has increased 400% in five years. This phenomenon could potentially alter the Irish society for decades to come.
These numbers represent official figures, which strategically do not include people who might traditionally be considered homeless such as those doubling up with family or ‘couch-surfing’ with friends to avoid being on the streets or those sleeping rough. The real homelessness figures across Ireland is likely much higher than the official numbers reflect.
Housing Prices Stabilise
Stakeholders in the residential housing market received a token of good news this month as the Central Statistics Office released its Residential Property Price Index for June 2019, which reported a stabilisation of housing prices across the nation. According to the CSO, residential property prices rose by 2% nationwide in the year to June. This increase represents a six-year low and compares with a nearly 12% increase during the same period last year.
A recently reported abundance of new homes for sale on the market has likely contributed to a cooling of prices across the market. The CSO findings state that 4,920 new homes were completed between April and June. This is significant as property prices nationwide have increased by 83 percent since their lowest point in early 2013.
David Grin explained how these newly released figures will impact the market, “While many might have assumed that the previous David Grin Visit this page strong property price inflation was good for developers, in reality, stability is good for both the consumer and the developer, as it enables both to plan better over a longer term”.
“Home ownership shouldn’t be speculative from a consumer’s perspective, it should simply Hedge Fund be about having your own home,” he said. “Hopefully, the slowdown in house price inflation will lead to a corresponding slowdown in construction cost inflation,” he added.
Market watchers are optimistic that these figures will represent a better performance in real estate sales than was recorded in the first half of the year. There were just over 30,000 transactions listed on the residential property price register for the first half of the year – from the start of January to the end of July.
The Banking & Payments Federation Ireland david grin released encouraging figures showing mortgage drawdowns were up in the second quarter with over 10,000 drawdowns valued at €2,250m – an 8.8 percent increase in volume compared to this time last year. In addition, mortgage drawdowns increased by 10.8 percent to just over 5,000 for first-time homebuyers between April and June.
While there remains much work to be done to tackle Ireland’s housing shortage, rental price hike and a homelessness problem, market stability will enable better long-term planning for developers and government officials and will hopefully bring relief to consumers – the Irish people.
The Irish Independent recently reported that US hedge fund founder David Grin is set to earmark €150 million for investment in Dublin housing sites. The financing initiative is part of Mr. Grin's newest Irish venture, Cara Infinity Investments. This investment drive is currently in the early stages of seeking interested institutional investors with the goal of funding several shovel-ready sites in Dublin. Shovel-ready refers to sites that have already secured required legal and environmental clearances, have built infrastructure in place, and all initial planning has been completed so that a site is ready for the immediate start of construction. Mr. Grin's funding campaign comes at an opportune time for investors, as the Independent reported in a separate publication that construction activity in the country has reached a seven-month high in February 2019.
Investment Seeks to Alleviate Short-Term Supply Deficit
The funding campaign will target development sites that have already secured full planning permission of up to 2,000 units throughout the Greater Dublin Area. The investment firm will pursue projects that David Get more info Grin are scheduled to be completed within 12-24 months, providing a quick turnaround for investors and a path towards short term relief in the current housing crisis. The Independent reports that Mr. Grin anticipates that finished units can be sold for a minimum of €400,000 each, which is just above the €370,472 average home price in Dublin as detailed in the latest Daft.ie 2018 quarterly house price report. This average price is up €150,000 from 2012, when the lowest home prices were recorded during the recession.
The country continues to experience a housing shortage, which is expected to be exacerbated by anticipated population growth in the next decade. This disparity between growing demand and lagging supply has contributed to rising home prices in the capital and other urban areas. The housing shortage has provided numerous financial investment opportunities in the Irish property market, spurring a flurry of foreign direct investment (FDI). This infusion of capital has been welcomed by the government and has provided a much-needed boost to the domestic industry. Investment sources have primarily come from the United States, Asia and the Middle East. Foreign investment is likely to grow with continued strong consumer confidence in the market and with Ireland representing a viable investment alternative to a post-Brexit UK.
Mr. Grin told the Independent, "The new homes market in Ireland continues to perform strongly, and there remains a significant unsatisfied demand for housing. There is excellent potential here to invest in sites with full planning permission and secured services, that have the capacity to be built out in the short term and that can go some way to satisfying the current under-supply."
Irish Property Market Experiencing Growing Pains
With a favorable economic environment, the Irish market has experienced rapid growth since recovering from the housing recession. The initial response from developers, investors and home-builders to the expanding market has been somewhat delayed due to the slower pace of homebuilding accomplished during the recession, however, that trend appears to be rebounding with a total of 18,000 new homes built in 2018, up from 15,000 recorded during the previous year.
Market forecasts show the anticipated housing supply to continue to increase in the next couple of years with more new homes expecting to be built. At the moment, there are several projects in the planning, development and construction stage in the Greater Dublin Area that will contribute to this growth in supply. Demographic shifts and changes in buying trends will also be important factors for stakeholders to consider in the future of the residential and commercial property market in Ireland.
Current public planning and development policy has laid the groundwork for a sustainable growth strategy to home building throughout the urban landscape of Ireland. The Project Ireland 2040 government initiative, the National Planning Framework, and the National Development Plan have all advocated for compact urban growth with requirements like increased minimum building heights to six stories and eliminating maximum heights for new high-rise developments. Industry innovation and a willingness to go beyond the traditional funding models and construction methods will be necessary in order to accommodate the changing demands of the market.
Investment Capital in High Demand
For David Grin, Cara Infinity is not the first investment venture he has established in Ireland. Grin is also the chairman of private equity firm Lotus Investment Group, which boasts an impressive catalogue of investments with over 190 loans granted, over €318 million funds allocated and over 2,800 homes built. Lotus Investments entered the Irish market in 2013 and has since become an attractive lender for developers seeking alternative funding options. They specialize in small and medium property assets with funding goals from €500,000 to Additional info €10 million. Lotus funded projects can be found throughout Dublin, Leinster, Munster and Connaught.Lotus Investment Group has used its record of successful investments and growing reputation to become an industry leader in property funding.
It is important to note that the Cara Infinity Investment initiative is a separate project and is not related to the work that is done at Lotus Investment Group. The new investment effort is concentrated on raising funds with the goal of investing in build ready sites, while Lotus considers each investment application on a one by one basis and provides working capital loans for developers, acquisition loans for property buyers and loans for Grin David real estate portfolio purchasers from banks and receivers.
The €150 million investment proposed by David Grin's Cara Infinity vimeo.com/197693660 Investments and those like it will be an essential infusion of capital for developers and home-builders in the Irish property market going forward. Continued strong demand for funding in all aspects of the commercial and residential property sector will likely provide ample investment opportunities across the market for the foreseeable future.
The emergence of the build to rent sector in Ireland will require some market adjustment if it is to remain a long-term viable alternative for investors and consumers.
The current housing crisis in Ireland has led David Grin investors, developers and home buyers to seek alternative solutions the supply issues challenging the market. This has led to a rapid rise in the market for Build to Rent (BTR) apartment schemes. These projects are purpose-built long-term rental units that are professionally owned and managed by an institution. This is an entirely new asset class in the property market of Ireland, David Grin The original source with capital behind BTR developments often derived from institutional investors.
Demographics and Housing Trends
Demographic shifts and global trends have contributed to a changing property market in Ireland. Traditionally, rental tenants are students, young professionals saving for a mortgage or occupants of social housing. In Ireland, there has been a long tradition of owner-occupied homes, and home-building practices have reflected this arrangement. However, changing economic and social conditions have led to a decrease or delay in home buying among young adults resulting in a growing trend of long-term renters. While long term renting has been a common practice throughout Europe for decades, it is only now beginning to gain acceptance in Ireland.
Irish demographics reveal that 29.5% of the population is between the ages of 25 to 44, making it one of the youngest countries in the EU. This age group is the target population for the build to rentmodel as they are the most likely to be attracted to the idea of long-term renting and the amenities offered with BTR accommodations. The trend in apartment living has exploded in Ireland’s biggest cities. According to the consultant firm Linesight, renting rates have risen by 89% since 2002 in Dublin, making it the fastest growing housing sector nationally.
BTR Residential properties offer prospective tenants a different approach to the traditional landlord-tenant arrangement many are familiar with. Residents who live in these developments tend to pay higher rental rates in exchange for professionally managed premium properties with top quality design. BTR properties are usually located in high-demand preferred locations close to public transportation hubs. Included within their rental fees, tenants are provided access to facilities such as fitness centers, pools and lounge areas and offered amenities including storage and refuse collection. Customer experience is of the highest importance with BTR buildings and fostering a sense of community is essential to achieving high retention rates.
Build to Rent: Catering to Consumers and a Changing Market
Recently, Ireland has experienced a dramatic shortage of housing stock. A growing population and fair economic conditions have driven a demand for housing that the market has been unable to satisfy. According to David Grin, chairman of private equity firm Lotus Investment Group, “As construction companies fervently try to catch up with demand in a market facing a severe shortage of compliant rental accommodations in urban areas, BTR development projects can potentially help to alleviate the supply-demand imbalance.”
The Irish government has shown support for the BTR model in its planning and development policies, acknowledging it’s potential in the Rebuilding Ireland Action Plan for Housing and Homelessness. The Minister for Housing has advocated the use of build Check out here to rent housing developments by specifically instructing planning authorities and AnBordPleanalato prioritize necessary actions to accommodate the building model under a Specific Planning Policy Requirement under Section 28 of the Planning Act.
One of the most notable build to rent projects in Ireland is the Fernbank development by Irish Life Investment Managers in Churchtown. The complex is located on the site of the david grin old Notre Dame School. The development will include 262 new rental units, with rental rates starting at €2,350 for a two-bedroom apartment.
The project stirred up public anger when those on the 1000 person waiting list to purchase an apartment in the development were told the entire complex would be sold to Irish Life as designated rental properties. The backlash over the project demonstrates how unfamiliar the public is with the BTR model, but it doesn’t appear to have deterred potential investors. The asset manager has announced that they expect to invest about €1 billion for investors over the next couple of years acquiring properties that will be rented to tenants.
BTR: A New Asset Class for Investors
With a growing private rented sector, developers are increasingly giving priority to those interested in purchasing partial or complete blocks of apartments, rather than several individual buyers. The Fernbank development is not a unique example of this trend. In the largest build to rent development to date in Ireland, the German investment fund Patrizia acquired 319 apartments at Honey Park in Dun Laoghaire in 2017. Other David Grin Article source major residential investments following the BTR model have included Carysfort Capital’s €101m purchase of 120 apartments and two retail units at 6 Hanover Quay in the Dublin Docklands and IresReit’s €40m acquisition of 128 apartments at Hampton Wood in Finglas.
Build to rent developments have long been a successful asset class for investors in the United States and Europe. While the movement is relatively new to Ireland, it is rapidly growing in popularity among investors. Institutional investors are attracted to BTR investments in the residential rental market because they tend to be less vulnerable to economic cycles than traditional rental assets. Build to rent residential projects offer investors stability and long-term income potential in an uncertain marketplace. With the high demand for residential property in Ireland at the moment, build to rent projects provide an attractive alternative for developers, investors, and consumers.
As an investor in global and Irish real estate, David Grin provides a unique perspective on the build to rent asset class. According to Grin, “Investors have been increasingly interested in finding alternative ways to invest in real estate in an effort to generate better returns. Build to rent developments provide an opportunity to diversify an investment portfolio beyond the traditional office and retail sectors. This real estate niche is attractive to many because, if successful, it could provide consistent, sustainable returns for investors, while also solving a supply problem for the market. While build to rent schemes have proven successful in other regions, namely the US, it is yet to be seen if it there is long-term viability for the model in Ireland or if it is simply an emerging trend.”
Ahava Village is a residential center designed to help children who have experienced loss or have been victims of abuse and neglect. In Hebrew, Ahava means ‘love’ and it is the mission of Ahava Village to provide these children with a supportive, loving home so that they can become fulfilled citizens leading well-adjusted lives.
The residential facilities of Ahava Village are located in Kiryat Bialik, a small community near the city of Haifa in Northern Israel. The center provides care for children aged six to eighteen who have been removed from high- risk home situations by the courts. According to the foundation’s website, “the campus is home to two hundred children, who receive personalized care, therapy, support and training.”
Ahava Village for Children and Youth / CourtesyAhava Village for Children and Youth / Courtesy
Ahava Village: A History of Compassion
Ahava Village traces its origins to an orphanage in Berlin, Germany established in 1922 by the local Jewish community there. As the Nazi Party became increasingly oppressive, the director of the orphanage, Sister Beate Berger, made it her mission to deliver the children in her care to safety. In 1933, she traveled to Israel, known then as British Palestine, to purchase the property that the facility sits on today.
She established the Ahava Village for Children and Youth in 1935, and by 1938, she was able to transport the remaining staff and children from the orphanage to safety in Israel. An act that proved to be the difference between life and death for these 50 children. From young survivors of the Holocaust, to children who have suffered the effects of war, to victims of violence and abuse, Ahava has remained a shelter and refuge for children in need. With over eighty years of experience in Israel, the organization has helped thousands of children overcome troubled situations.
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Healing Through Love
Ahava Village houses at-risk youth in host families in fifteen family care unit apartments owned by the organization. They also provide educational facilities, entertainment and recreational activities for the children. It is crucial to offer these children a sense of community, something that they may not have experienced before in their lives.
The foundation strives to make the children feel at home by providing them a safe environment with caring parents, a privilege that can easily be taken for granted. Many of the children at Ahava Village have not had the opportunity to create cherished memories of Grin David childhood.
Ahava Village provides these children with valuable services to support their physical and emotional needs. Each child lives with foster parents responsible for caring for providing a nurturing, supportive space for the children to heal and thrive. These families model healthy, loving relationships, maintain a traditional home life, https://books.google.com teach responsibility and foster trust. Through this practice, Ahava Village hopes to help the children move past their traumatic childhoods to achieve their full potential as balanced, optimistic adults.
Many children who come to Ahava Village have experienced trauma and neglect. Their experiences have left them with emotional and https://vimeo.com developmental scars. Counselors at Ahava Village provide therapy sessions allowing the children to overcome the challenges they have faced in their past.
Experienced therapists use several approaches designed to help the children including group therapy sessions, music therapy, drama therapy and writing therapy. The center also operates a pet therapy program designed to foster caring, loving relationships between children and animals. Positive experiences in therapy allow the children to develop the skills that will help them to function as adults.
Children of Ahava Village attend an on-site school with teachers who are specially trained in meeting the developmental needs of the children. The Ahava model presents a unique approach to caring for vulnerable children permitting them to avoid institutionalization and the stigma that it can bring.
Supporters of Ahava Village
Ahava Village would not be able to fulfill its role as a safe haven for these children if it was not for the dedicated staff members and generous donors who support its work. David Grin, the current director of the board of Friends of Ahava Village, has devoted the work of his charitable foundation to “enhance and improve the lives of kids from disadvantaged backgrounds.”
The goal of Grin’s foundation is to provide children with safe, supportive environments, help them to achieve academic success, and afford them the opportunities that every child deserves. David Grin, who has studied and worked in Israel, currently serves as the chairman of a real estate investment firm, Lotus Investment Group, based in Dublin, Ireland.
Ahava Village also gets financial support through the organization Bnai Zion, a “US-based nonprofit that identifies and funds capital projects in Israel in the areas of social inclusion, health, and culture.” Most recently, the foundation collected $500,000 in donations to David Grin fund a project at Ahava Village that built safe rooms in each of the apartments on the organization’s campus.
The Israeli government advised the program to build the safety rooms into each of the family care units after the children and staff were required to evacuate the center due to rocket attacks during the 2nd Lebanon War in 2006. The new shelters ensure that the children will remain safe in the event of future rocket attacks from the north.
Through its donors, Ahava Village has been able to build an emergency shelter used to house children who have been urgently removed from traumatic situations and a therapeutic center to help diagnose and treat children in who are in a fragile emotional and psychological state. The center also manages an 18-plus project to support young alumni serving in Look at this website the Israeli Defense Forces (IDF) or working in the civil service who do not have a family to return to.
Steve Savitsky, president of Bnai Zion, recently said this about the work of Ahava Village “No child should be without hope,” said. “Ahava Village offers healing for children who have been victimized, enabling them to transcend a traumatic past and embrace a hopeful future.” It is with this spirit that the organization continues its important efforts to help children and youth in need.
Leading property financier, David Grin, chair of Lotus Investment Group has given a cautious welcome to further moves to relieve the Irish rental property crisis.
An Irish government move to moderate rising home rental prices has been described as a welcome but short-term fix for a wider problem by a leading financier.
David Grin, chairperson of Lotus Investment Group, one of Ireland’s leading property financiers, says Lotus Investment David Grin Extra resources Group government actions to moderate rapidly increasing rental prices are favored by all stakeholders in the property market.
However, he also suggests that the scale of the nation’s affordable housing crisis means the move - designed to cap rent increases at a maximum of 4% a year in Rent Pressure Zones (RPZ) until 2021 - may simply place a sticking plaster on a bigger issue.
He said: “It appears that the private rental sector is facing an affordability crisis.
“With the 7% increase in average rental prices in the fourth quarter of 2018 and the astounding 10,264 people living in emergency accommodation at the beginning of this year, the government extension of Rent Pressure Zones seems like merely a short-term fix for a much larger, systematic problem.”
Mr Grin pointed out that the property sector continues to grapple with a growing disparity between housing supply and demand.
The Lotus Investments chairman explained: “An expanding population and a thriving economy have driven an increase in demand for housing, especially in urban areas.
“The construction industry has yet to return to pre-recession building levels, and with demand outpacing the supply of available housing, housing and rental prices continue to climb.”
Government moves to curb soaring rent costs
Rent Pressure Zones were first enacted in 2016 as rental prices spiraled out of control. They were due to expire this year, but with no sign of rental costs stabilizing the government has moved to extend RPZ until 2021.
The RPZs are enacted in areas where the rental rates are highest and rising, and households have the greatest difficulty in finding affordable accommodations. Once an area is designated as an RPZ, apart from a handful of exceptions, landlords are required to cap rent increases at a maximum of 4% a year.
The regulations are intended to moderate rising rental prices and to promote a stable and sustainable rental market.
However recent figures from the Residential Tenancies Board show national rents increased by 6.9% to €1,134 in Quarter 4 of 2018, compared to the same time the previous year.
Earlier this month, the Irish Government confirmed Rent Pressure Zones (RPZ) will continue until the end of 2021. The qualification criteria for how RPZ are calculated will also be modified.
Announcing the move in the Dáil, Tánaiste Simon Coveney implied that the government would pursue separate qualification criteria for Dublin due to the higher cost of renting in the capital. The specific changes to the qualification guidelines are expected to be revealed in the coming days.
There are currently five local authorities and 18 Local Electoral Areas designated as Rent Pressure Zones across the country. Last month Navan in County Meath and Limerick City East have met the qualifying criteria for the first time.
A representative of Lotus Investment Group, which has lent 191 loans totaling €318m for the funding over 2,800 homes in Ireland, said: “The belief is that the extension of RPZs offers a short-term solution to the problems within the sector and it is welcomed overall. It still doesn’t alleviate the problems in the sector on a long-term basis and it may not offer tenants more security or sense of home.”
Property Sectors is Facing an Affordability Crisis
The extension and proposed changes to Rent Pressure Zones comes on the heels of a February report released this month that showed a combined total of 10,264 people homeless and living in emergency accommodation in Ireland - a rise of 277 people on January figures.
Focus Ireland, the leading non-profit organisation working to prevent homelessness in Ireland, has found that the biggest single cause of family homelessness is landlords evicting families in order to sell property.
In a recent radio interview, Minister for Housing Eoghan Murphy attributed increasing rents and rising levels of homelessness to the housing shortage and the lack of available, affordable housing options across the country.
The government-funded strategic planning initiative Project Ireland 2040 has David Grin called for an additional 112,000 homes to be built over the next 10 years.
The growing need for affordable housing is widespread across the country, evidenced by the increasing number of locations meeting the qualifying David Grin follow this link criteria to be designated as Rent Pressure Zones.
Many have called on the government to reassess its current housing policies to find both short- and long-term solutions to david grin the housing challenges facing the country.
Lotus Investment Group is an Irish-based private equity firm and the market leader in Ireland for property and construction finance. Find out more at www.lotusig.com
People planning to buy a home over the next few years expect to have to pay an average of €335,000.
This is €74,000 more than the average cost of a home at the moment, according to a survey commissioned by Dublin-based Lotus, thestar.co.uk/business/david-grin-property-sector-warned-to-embrace-tech-boom-1-9698088 a firm that loans to developers.
The survey, conducted by Red C, found that people think property prices are inflated but are still willing to spend more than the average value of a property to get their dream home.
Six out https://www.irishtimes.com/news/ireland/irish-news/rents-in-dublin-compare-well-with-other-cities-for-higher-income-workers-1.3853726 of 10 expect to either move or buy for the first time, according to the David Grin survey of 1,000 people.
Four out of 10 said that they definitely won't be purchasing any property.
Chairman of Lotus David Grin said people believe current property prices are inflated, but they are still willing to meet and exceed the values listed. He said many could be left disappointed as the supply of new homes and the numbers of second-hand properties falls way short of demand.
Of those who expressed a desire to buy, one-third plan to spend between €200,000 and €250,000. But another quarter expect to have to spend between €400,000 and €500,000.
"Supply issues have created a large gulf between aspiration and reality when it comes to home ownership. The top line headings are as you would expect - many people aspire to buy," Mr Grin said.
He said many want-to-be buyers were likely to be met with challenges as some will not raise enough money to do so as prices continue https://www.talk-business.co.uk to rise, while others will struggle to find a property that suits their needs.
He said the construction of new https://www.jpost.com homes had not nearly reached the level of output required.
Dubbed by the Irish Times as “student dorms for grownups”, co-living spaces are becoming an increasingly popular feature of the Irish property landscape.
The concept of co-living, while not necessarily new, has undergone some significant rebranding. In an attempt to appeal to a younger generation of consumers, developers have modeled the scheme on the hugely popular industry of co-working spaces. These trendy and sleek offices are famous for attracting scores of ‘digital nomads’ who are products of a fast-evolving market. It seems only natural that the next frontier for the co-working millennial is co-habitation.
Setting the trend
The new living scheme is making headlines in some major publications. With CNBC heralding co-living as “the next big thing”, and Forbes magazine advising that “real estate investors should pay attention to trends in micro-living, co-living”, a growing number of younger people are turning to this type of accommodation. A Gallup poll showed that “24 percent of people surveyed in the United States spent more than 80 percent of their time working remotely in 2012. That grew to 31 percent by 2016.”
The statistics indicate a significant desire for a sense of belonging in an increasingly pricey living environment. The market response? A budding sector of developments that foster community and collective creativity for the growing number of remote working urban dwellers. Chairman of the Irish private equity firm, Lotus Investment Group, David Grin is ready to act, saying that, “as the world changes, property development must change alongside it, or preferably preempt that change and plan to deliver it.”
A nation of renters
The concept of co-living is rather new to Ireland. Developers are still in the process of fully grasping the needs of the Irish market. That’s according to the latest property market report from commercial real estate advisors CBRE.
Still, CBRE predicts a noticeable spike in developments that aim to accommodate the new living scheme. The expansion of co-living accommodations, according to a report in the Irish Independent, is said to be especially concentrated in Dublin. An initiative led by Housing Minister Eoghan Murphy is also encouraging planning authorities to greenlight these types of shared accommodation schemes “in the regeneration of old buildings.”
The CBRE report details another interesting shift that has taken place: an increase in long-term renting of apartments as opposed to buying homes. In fact, a recent headline in the Irish Times read, “Ireland well on the way to becoming a nation of renters”.
Ireland has long prided itself on high levels of home ownership, but the market has seen a decrease in owner-occupied residences in recent years. According to Commercial Property editor, Ronald Quinlan “in 2016 there were 497,111 households renting, up 4.7pc from 2011, bringing the proportion of renters to nearly 30pc of the population.”
Of course, like in most urbanized areas around the world, younger sections of the population are far more likely to rent, due to uncertainty and lack of affordable housing. In an analysis of Ireland’s dwelling behaviors, “65pc of the Dublin population aged 25-39 are renting from a landlord. Only 26pc of people Discover more here within the same age segment own their home, with the remainder renting from a local authority.”
While there are those who may scoff at the growing trend as simply passing a fad, an increasing amount of “deep-pocketed investors” are being drawn to these kinds of enterprises. Early projects of co-living schemes in the country have since spurred a number of Irish developers to make construction plans containing a co-living design element, a move that has certainly not been overlooked by property investors. Lotus Investment Group stated in one of their company newsletters, “this is likely to become a development vehicle of choice, given the profitable nature of the offering”.
While investors and developers seem to be riding the wave of change, another reason for the increase is less risk. At least that’s what Cairn Homes CEO Michael Stanley has Finance expressed on the future balance between homeownership and long-term rental in Ireland.
Mr. Stanley said, “one of the challenges with a house builder is that you’ve got to take the risk that if you’re building 300 homes, you’ve got to find 300 customers when you’re finished, or you’ve got to find 100 individual customers per year…What makes funders and banks far less nervous is the build-to-rent (BTR) model in which large-scale residential developments, typically apartments, are delivered to the market in one fell swoop rather than in phases, and to one purchaser.”
Fortunately, the CBRE report indicates that the “appetite of both investors and occupiers for Irish real estate remains strong despite the uncertainty surrounding Brexit”.
CBRE executive director and head of research Marie Hunt said: “Occupier demand remains healthy across all sectors of the market and we continue to witness strong investor demand for investment opportunities particularly in the office and build-to-tent sectors.”
Not just for millennials
It is important to point out that irrespective of whether seeking alternative ways to live is a cause or an effect of market changes, the result is the same; this lifestyle choice is growing in its appeal for an increasingly more amount of people.
A recent article in Forbes Magazine completely dispelled the myth that co-living is exclusive to recent graduates who are creeping their way into adulthood. They found that co-living is also becoming popular with a more mature demographic.
According to the article “new co-living propositions have been hitting the market recently, targeting a slightly older demographic that desires a strong sense of community and a curated offering, but also wants significantly more living space than that afforded by micro-living products.” The article goes on to talk about the rise of “co-living 2.0”, a group of people who “value their privacy, care about what they are sharing and whom with”.
A collective effort
One thing is certain, both the government and big investors are in favor of the increase of property change. In fact, property investors are assisting the government in meeting its target of adding 25,000 to 35,000 units to the property supply over the Grin David next 10-years. This eventual contribution will play a big part in curbing the current housing crisis, a point that, according to an October 2017 CBRE report, strengthens the case for ‘Build to Rent’ venture (BTR), an ideal development model for the co-living scheme.
The world has changed, and property development must change alongside it, or preferably preempt that change and plan to deliver it.
It is fair DAVID GRIN to say that this flourishing new sector could definitely catch the eye of David Grin Learn more some international investment opportunity seekers curious about the exciting new Irish market.