According to a report by AIB, the presence of institutional buyers in the residential property market is the primary reason why large-scale standalone apartment blocks are being built. The report examines the construction industry in the rental sector and has been authored by AIB head of property research Pat O’Sullivan and property economist Rory McGuckin.
A key finding of the report is that the viability of apartment construction “remains challenging” in many parts of Dublin and this “continues to constrain the supply of new residential units in the capital”. It also found that currently, the construction of large-scale apartment schemes outside of Dublin is not, for the most part, viable and suggests that the presence of institutional buyers in the residential market is the primary reason why large-scale standalone apartment blocks are being built. “Without the presence of institutional buyers of apartment blocks in the private rental sector, the viability issue would be even more pronounced and the supply of new apartments would be even lower,” it says.
Irish Construction Industry Magazine