‘Welcome to generation rent’, real estate agent says
Logistics sector expected to be ‘star performer’ in commercial market this year - JLL
People in their 20s and 30s are happy to continue renting as they seek to maintain their existing standard of living, JLL has said. Photograph: iStock
The days of 80 per cent property ownership among the Irish population are gone, real estate agency JLL has said.
In its report previewing both the commercial and residential property market in Ireland in 2018, the group said the market of the future will see between 40 and 50 per cent of people renting.
“Twenty- to thirty-somethings will want to keep their existing standards of living, for which they are happy to compromise by staying in rental properties.
“Whilst there are many that cannot afford to buy, there is a section of the market making a conscious decision, which is based on prioritising high quality lifestyle choices. Welcome to generation rent,” the report said.
JLL noted there has been an increase in office occupiers enquiring about developer’s residential portfolios which presents opportunities for developers that are planning for mixed use property portfolios.
On the commercial property front, the agents suggest that logistics are expected to be the “star performer” this year with opportunities for the development of prime, new facilities used by global logistics providers.
As for investment opportunities, similar volumes to last year, of around €2 billion, are expected this year with more “sophisticated entrants” coming to the market.
“The general consensus is that the stability is continuing across all sectors, with a return to more ‘normal’ market conditions. We need to remember property is a cyclical investment, but for now, we remain in a benign interest rate environment, and occupier markets remain robust,” said John Moran, JLL Ireland chief executive.
“We cannot overlook the negative impacts of the housing crisis and our international competitive position. Therefore I see growth slowing to more sustainable levels, and developers who embrace technological change and understand the role of real estate in the wider economy will be those that are successful,” he added.