Three hundred apts sold to institutional investor
Good news for everyone. Prices for 2 bed apartments in existing blocks within the Northwood demesne where this is located range at the moment from about €230-€270k so construction of Blackwood Square would never have been feasible if it depended on private buyers paying that €416k average for mostly 2 bed units that has been paid. While it wouldn’t be possible to find private buyers, it stacks up as an investment for the institutional purchaser looking for long-term reliable cashflow and provides a big boost to the supply of new apartments for rent in Dublin. It’s a win-win, since it would never have been built in the absence of an institutional purchaser willing to pay those kind of prices.
But now we will have a massive transfer of wealth from working renters to the institutional investor.
ONE party is certainly a winner alright…
The “working renters” would not buy these properties for €416k and therefore they wouldn’t be built. Even with Help-to-Buy, they would likely need to have sufficient earnings to access a €375k (90%) mortgage, then they would have the not insignificant cost of servicing that mortgage. Instead, the investor is renting 2 beds out up there (at their recently built Bridgefield blocks) for around €1,950 per month - which, compared to a €416k average purchase price, isn’t bad value for a renter especially as the €3k+ a year service charge (for bins, insurance, maintenance of common areas, gym, concierge) you would usually pay as an owner of a 2-bed in a high-amenity apartment block is included.
If the working renters you refer to actually want to buy, they have ample selection of 2-bed properties in that immediate area for sale in the region of €250,000 that are not flying off the shelves. This development is not prejudicing or worsening their position as they wouldn’t buy the apartments at the prices required to make it feasible to begin with and they wouldn’t be built, which is good for nobody.
So I would respectfully disagree with your suggestion that the investor buying these is the ‘ONE’ winner. They are adding much needed stock to the rental market that ultimately alleviates pressure on the market overall, which is good for everyone.