Q1 2020 saw the highest volume of Q1 spend ever recorded in the residential investment sector in Ireland. In total, €672 million was invested in the residential sector during the first three months of 2020, compared to less than €115 million invested in the sector during the same quarter last year.
The residential sector accounted for 53% of total investment transactions in the Irish market in Q1 2020, with offices comprising 39% of spend in the three-month period by comparison.
Over 185 residential investment transactions extending to more than €1 million have been completed in Ireland since this sector first came to prominence in 2012, amounting to a total spend of over €5.78 billion. Q1 2020 saw 12 residential investment transactions completed - double the number of transactions completed in the same quarter in 2019.
Forward-commit transactions accounted for 56% of residential investment transactions in Q1 2020 - a similar split to 2019. The remaining 44% of Q1 2020 transactions comprised standing stock trades.
There has been an increase in planning applications to develop apartment schemes in the last 12 months with planning permission granted for 20,582 apartment units in 2019, compared with 9,138 units during 2018 - an increase of more than 125% year-on-year.
Recent transactions, particularly forward-commit transactions, have seen existing owners adding to their holdings, bringing the total number of residential units under institutional ownership in Ireland to approximately 14,800 at the end of Q1.
Prime yields for multifamily investment opportunities in the Irish market remain stable at approximately 3.75%.
While Covid-19 is certain to impact on transaction volumes in this sector during the next quarter, institutional appetite for multifamily product is expected to remain strong, with this sector deemed to have more defensive characteristics than some other property market sectors. This is particularly true of the Irish residential market, which is fundamentally undersupplied.