Apartments on the rise as house-building slows

Apartments on the rise as house-building slows

The number of apartments built here increased 64pc in the first three months of the year, driven by investment from so-called ‘cuckoo funds’.

At the same time there has been a slow-down in the pace of new house-building, which has clocked up the slowest increase since 2013.

The number of apartment units finished in the first three months of this year was up 64pc compared to the same period last year, new figures from Goodbody show.

In the build-to-rent sector, so-called ‘cuckoo funds’ will be the biggest driver of the growth in apartments, according to Goodbody’s ‘BER Tracker’ report.

Without these ‘cuckoo funds’, fewer apartments would be built, according to the report.

“Without this investment, it is likely that the output in the [apartment] sector would be much lower in the coming period due to viability and funding constraints,” said Dermot O’Leary, chief economist at Goodbody.

The selling of homes to ‘cuckoo funds’, which then rent them out en masse, has become increasingly common in this country as the housing crisis continues to spiral.

Critics say it deprives aspiring home-buyers of a chance to buy a home, in the way that cuckoos elbow fledgling birds from their nest.

Criticism has come from as high as the United Nations, which recently accused the Government of facilitating the “financialisation of housing” through preferential tax laws and through weak tenant protections, among other measures.

Overall, houses remain the most common form of residential unit being built.

As apartments represent fewer than one in five residential units completed during the three months, the proportion of output coming from this type of residential property remains small. In addition, the growth in apartment building is coming from a very low base.

“The apartment growth rate is coming from a low level, as Ireland has the lowest proportion of apartments in its housing stock out of any country in Europe,” Mr O’Leary said.

New figures from Goodbody show that 2,358 housing units were built in the first three months of this year.

This represents an increase of 16pc year-on-year, the slowest level of growth since 2013, when Goodbody began its ‘BER Tracker’ series.

Overall, there were 4,255 residential units completed in Ireland in the three month period, up 22pc year-on-year.

Completions of residential units in housing estates continued to account for more than half of the output.

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