Households accounted for less than 60 per cent of new homes sold last year, with funds and other organisations making up the rest of the market, according to new research from estate agent DNG.
Data compiled by the agency shows so-called block sales, which sees one buyer take control of multiple units at an apartment block or development, accounted for 42 per cent of all new home sales in the State during 2023, DNG said in a statement.
That means “private individuals only had the opportunity to purchase six out of every 10 homes built.,” DNG head of research Paul Murgatroyd said.
While housing bodies and local authorities, as well as investment funds, may have been buying blocks of homes for social and affordable housing, the data underlines the squeeze on the market for individuals hoping to secure a new home.
In general, developers will often prefer to offload a slew of properties to a single buyer in one deal, instead of working with several individual buyers across numerous transactions.
The squeeze was even greater in Dublin. According to DNG, as much as 61 per cent of new homes sold last year were part of block sales.
“This significantly reduced the volume of individual units available to buy on the open market by private households in 2023. In total 3,528 out of 5,752 new homes sales in Dublin last year were sold as part of block sales. As a result, only 2,116 new homes sales were to individual buyers in the Dublin market in 2023,” DNG said.
Block sales accounted for about a quarter of new home sales in Cork, Galway and Kildare and more than half of such sales in Limerick.
“Total nationwide new homes transactions showed a marginal increase of 3 per cent in 2023 over 2022,” Mr Murgatroyd said. Yet in Dublin “the figure was actually down by 10 per cent year-on-year, with the balance of the country increasing by over 11 per cent in the same period, indicating that new homes output and sales are improving strongly outside the capital.”
The report also indicates the State’s property price register (PPR) is missing more than a quarter of all home sales because of how block sales are classified, DNG said.
While the register captures all homes sold, many deals involving multiple homes are classified as just a single, or block, sale. That could see the outright purchase of an apartment block, or multiple homes in the same development, classed as one transaction, DNG said.
“Compared to the total sales shown on the PPR, the analysis of multi-unit sales found that in 2023 there were an additional 5,163 new homes sales that were part of block sales, that were not captured by the PPR, equating to 30.3 per cent of all new homes sales last year,” DNG said.
“When the adjustment is made to the total new homes sales to take into account all units included within block sales, the research shows that a total of 17,039 new units were transacted in 2023 compared to the 11,876 sales reported on the PPR.”
DNG managing director Keith Lowe said Government incentives for first time buyers are showing signs of working but they need some changes. He pointed to the threshold for the Help to Buy tax credit, which he said should be increased to €600,000 from €500,000 in Dublin.
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