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Property investment in Dublin expected to tick up in first half of 2024

City ranked 13th among a group of 30 European cities in report by PwC and the Urban Land Institute

A PwC and the Urban Land Institute report cites an unnamed local developer who was said to be 'optimistic about Dublin as the only English-speaking capital left in the EU'.

Colin Gleeson
Tue Dec 12 2023 - 06:00

Dublin has consolidated a “mid-table” position in an annual ranking of European cities for property investment and development potential, but the market should pick up in the first half of next year, according to Urban Land Institute (ULI) chairwoman Marie Hunt.

A new report by PwC and ULI, entitled Emerging Trends in Real Estate Europe, has ranked Dublin 13th among a group of 30 European cities. Dublin has now held that position for each of the past three years.

“As a relatively small city, Dublin punches above its weight with a consistent ranking of 13 for investment and development potential over the last three years,” the report said.

The report cited an unnamed local developer who was said to be “optimistic about Dublin as the only English-speaking capital left in the EU”. They added that Brexit “continues to be a benefit for Ireland”.

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The report continued: “Ireland’s economy is seen as relatively strong, particularly in terms of its fiscal position, domestic demand and employment, which should support housing development in the future.”

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It said Dublin “has also benefited from a similarly rapid downgrade of values to the UK, while the economy is seen as relatively strong, which should support housing development”.

Ms Hunt said Dublin’s “mid-table” ranking was “actually not a bad thing”.

“Most cities in Europe move down the rankings year-on-year so I think it is positive that Dublin has stayed where it is,” she said after publication of the report.

“What we’ve experienced in the Dublin market over the past 12 months – whether it be the occupier or investment market – is that it’s not dissimilar to what we’re seeing in any other European market.”

Ms Hunt said activity in the market “is very much dictated by what’s happening with the interest rates”.

“The expectation is that once we have visibility in terms of where interest rates are going to settle, investors can start pricing real estate again,” she continued. “The big challenge over the past 12 months was always that interest rates would go up again.

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“Until they settle, people can’t really make pricing decisions. Now we have started to see quite a bit of investment activity over the past couple of months, which is good. We haven’t really seen a lot of big ticket transactions.

“Most of what has been trading has been relatively small, but as we go into 2024, certainly in the first half of the year, I think we will see more assets coming to the market.

“Again, that’s good for the market because it will give good visibility on pricing. That was a large part of the challenge this year in that it was very hard to get transactional evidence and comparables because there was so little trading.”

Joanne Kelly, real estate leader with PwC Ireland, said Dublin “continues to offer great prospects for real estate investment and development potential”.

“Albeit the global uncertainties, we have an economy that continues to show robust domestic demand, with near full employment and continued foreign direct investment inflows,” she added.

London and Paris again took the top two places in the report’s city rankings. The report said that with “so much uncertainty” at play, property investors are “more careful than ever” about how and where they deploy their capital in Europe.

“For many, this means targeting cities that offer liquidity in riskier times,” it said. “The two cities accounted for around 15 per cent of total real estate transaction volumes in Europe in the first nine months of 2023.

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“And the premium on liquidity allied to economic performance is also evident in other cities increasing in the rankings in this year’s survey: Madrid (3), Milan (6) and Lisbon (8).

“Though still relatively highly placed, the German cities of Berlin (4), Munich (7), Frankfurt (9) and Hamburg (11) have slipped in the rankings in terms of investment and development prospects.”

Colin Gleeson

Colin Gleeson

Colin Gleeson is an Irish Times reporter

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