PRS growth in Ireland needs to produce the homes people are seeking
Ireland’s private rented sector (PRS) has seen unprecedented growth in the last few years. Now the race is on to complete blocks as demand reaches an even higher pitch, and the challenge for developers is to create the premium homes today’s residents expect.
Dublin has been the focus of international business interest for years. Many large companies have set up headquarters in the city, including high profile tech companies, drawn to the lifestyle and financial setup offered. The UN has named Dublin as one of the fastest growing cities in Europe. Other cities such as Cork and Limerick have also been attracting national and international interest.
The question is, against this backdrop of growth, where is everyone going to live? One of the most pressing issues facing Ireland is the imbalance between housing supply and demand, noted CBRE’s 2022 Ireland Market Outlook. House prices have rocketed, as has been the case across much of the UK, and many young people are being forced to rent.
The emergence of PRS
The result has been significant investment in PRS, from both national and international investors. Despite a slowdown caused by the pandemic, this growth is showing no sign of slowing. In the first three quarters of 2021, total investment in PRS in Ireland came to €1.5bn, according to Cushman & Wakefield, a huge increase on the €638.8m recorded in the same nine-month period in 2020.
Since the sector’s growth took off in 2016, investment so far is leading to the creation of more than 12,000 new homes, reported Hooke & Macdonald. Many of these homes are in Dublin, where 85% are in the suburbs, but cities such as Cork, Galway and Limerick are also being targeted.
However, there is by no means enough new homes being created. Availability plummeted during 2021 and many apartments are being rented months before completion. While several developers have submitted planning applications for new schemes, supply is not expected to reach demand levels. The number of homes available to rent across Ireland dropped to its lowest point since property advertisement website Daft started tracking availability in 2006.
Of course, this means that rents have also increased. National rents in Q2 2021 were 7% higher than the previous year, reported Cushman & Wakefield, averaging at €1,848 a month. Those able to pay this level of rent, are therefore expecting a certain level of service.
High-end is the expectation
Here is the challenge for PRS operators – how to create the high level of homes to justify the high level of rent currently commanded across Ireland’s cities. Ireland is becoming a nation of renters not only because of cost but because people are drawn to the lifestyle that the PRS offers.
Blocks can offer varying levels of amenities, from bundled services right up to a more premium offer that includes a concierge, gym and options such as a dining room to rent. Residents who are drawn to this flexible lifestyle approach their home as they now approach other aspects of their life, expecting everything at to be at their fingertips at the click of a button.
Automated parcel lockers are an ideal amenity to add to a PRS scheme. The setup will satisfy not only residents’ expectations of ease of life but also a property manager’s need to run a property efficiently and reliably.
While the number of parcels being delivered each day has been increasing for decades as online retail has become the norm, the national lockdowns over the last two years sent deliveries into overdrive. In a PRS block, this has become a real challenge; how can a property manager or team find time to receive, sort and store the hundreds of parcels that could arrive each day? The result is that property managers have their time dominated, rooms are full of mountains of parcels and residents risk losing parcels in the confusion.
A top resident amenity
All these challenges can be smoothed away by parcel lockers. Parcel delivery drivers can deliver a parcel directly to a locker, using an easily generated code. The resident is then given a code to retrieve their parcel, any time of the day or night. This is exactly the level of flexibility, reliability and security that today’s residents expect.
As more PRS blocks are completed across Ireland, operators will face increasing competition to attract residents. While each block or operator will have its own approach and offering, there is no escaping that everyone has parcels delivered. Parcel lockers are an amenity that will be used every day and will quickly become a differentiator for an operator that can deliver the ease of life residents are seeking.
Ireland’s PRS growth is showing no signs of abating. As more people opt to rent, whether through necessity or choice, getting the offering right now will create a swathe of homes that people really want to live in.