Despite operating in a volatile global economy, Ireland's housing market – especially in areas such as Dublin and Cork – continues to offer property investors potentially lucrative Return on Investment (ROI). High gross yields, on properties across different sizes and locations, make Ireland an attractive prospect for property investors looking to capitalise on the buy-to-let market.
With the exception of the COVID-19 pandemic, Ireland's housing market has experienced exceptional growth year-on-year. Ireland's Central Statistics Office (CSO) shows that, in July 2022, the national residential property index rose by 13.1% in nominal terms – 3.67% on an inflation-adjusted basis – from the previous year. An increase of 8.48% from the previous year.
Generous returns are not confined to apartments or smaller properties. Nationwide, the average house price rose by over 8% during the year to Q2 2022. This could be due to strong performance across numerous industries – such as pharmaceutical and technology firms – supporting wider economic growth. The Irish economy is expected to grow by over 5% in 2022 and by 4% in 2023.
From 2014 through to 2019, Ireland's economy grew by an annual average of 10%. Economic growth has buoyed the housing market – both in relation to house prices and the buy-to-let market. In the capital, Dublin, rental yields are considered to be particularly strong. However, for buyers of residential property, transaction costs are higher than average, at approximately 9%.
The second-largest city in Ireland, and the third-largest by population – with approximately 220,000 inhabitants – Cork offers investors a resilient housing market, with potential for lucrative returns moving forward. As of 2022, Cork offers investors exceptional gross rental yields and is therefore an attractive prospect for speculators hoping to enter Ireland's housing market.
For an end-of-terrace apartment in Cork – with a purchase price of EUR 750,000 – gross rental yields can reach as high as 11%. On average, rental yields in Cork generate approximately 6.6% on. However, additional research reveals that one-bedroom, two-bedroom and three-bedroom apartments can achieve rental yields of 5.56%, 7.72% and 7.32% respectively.
Barriers for entry into the housing market in Cork are less than in more expensive cities like Dublin. One-bedroom, two-bedroom and three-bedroom apartments can cost EUR 220,000, EUR 245,000 and EUR 295,000 with average rents of EUR 1,020, EUR 1,576 and EUR 1,800 respectively. When considering the gross yield potentially available, Cork offers attractive ROI.
Situated on the east coast of the island of Ireland and at the tip of the River Liffey, Dublin is the capital city of the country and has grown to become an incredibly popular tourist destination – as well as a solid investment opportunity for property speculators. Dublin is also the largest city in Ireland, with a population of over half-a-million inhabitants (2016) – almost double the size of Cork.
Gross rental yields in Dublin are considered excellent. Although Dublin is a large city, performance can be tracked. In Dublin 1, Dublin 3, Dublin 6W, Dublin 7, and Dublin 8, gross rental yields range from 6.19% to 7.96% and one-bedroom apartments will likely earn more than two-bedroom apartments. In Dublin, smaller properties may enable investors to obtain greater ROI.
Purchasing smaller properties, in order to explore the buy-to-let market, does not necessarily detract from yields. For apartments worth EUR 270,000, EUR 350,000 and EUR 450,000, gross rental yields fetch 8%, 8.23% and 8% respectively. EUR 850,000 apartments only offer marginally higher rental yields of 8.47%. Investors may be able to invest less to earn generous ROI
With Ireland's economy set to grow at a robust pace in the near-term, the country's housing market could be poised to offer lucrative returns for property investors. In particular, Ireland's buy-to-let market in Cork and Dublin offers strong yields of between 6 – 8% across numerous property types and locations. The housing market in Ireland's cities is well worth exploring.