Australian Bank investing in Irish property

[cremeegg]

The Sunday Business Post is reporting

Macquarie, the Australian bank, has established a €100 million fund to buy homes in Ireland, new financial documents have shown. Broadstone Housing Investments Limited, an Irish entity controlled by the bank, has already started to use the funds to acquire second-hand homes in Carlow.

Documents seen by the Business Post show that the fund has bought several homes in a housing estate in Carlow in March for €875,000.

Australian bank Macquarie sets aside €100m to buy Irish homes

Documents seen by the Business Post show that the fund has bought several homes in a housing estate in Carlow in March for €875,000

www.businesspost.ie

Presumably the €875,000 is the total price for 'several homes' rather than a price per home, but still. Carlow, housing estate, wow!

That an Australian bank considers it worth its while to do the necessary due diligence and risk assessment to buy houses in housing estates in Carlow seems incredible to me.

 

[DazedInPontoon]

That an Australian bank considers it worth its while to do the necessary due diligence and risk assessment to buy houses in housing estates in Carlow seems incredible to me.

Assuming that they did their due diligence and risk assessment, of course.

 

[jpd]

When we get around to building enough houses to meet the market demand - somewhere between 40-50,000 units per annum - then houses prices and rent will be lower and affordable

So, if you are of the opinion that we will not or are most unlikely to meet that target, then investing in housing in Ireland is a one-way bet over the next 5 to 10 years.

 

[NoRegretsCoyote]

Yields in Ireland are up to 11% which is very high for residential property anywhere.

Bad tenants are well protected under Irish law but, averaged over a portfolio of hundreds of properties, the risk is manageable for Macquarie.

Tenants like renting from a fund as the landlord isn't going to look for the house back after a year in Dubai. There will also be a number to call and someone competent to carry out minor repairs.



It makes perfect sense to me. Funds are going to be a bigger and bigger part of the private rented sector in the next decade.

 

[Steven Barrett]

Yields in Ireland are up to 11% which is very high for residential property anywhere.

Bad tenants are well protected under Irish law but, averaged over a portfolio of hundreds of properties, the risk is manageable for Macquarie.

Tenants like renting from a fund as the landlord isn't going to look for the house back after a year in Dubai. There will also be a number to call and someone competent to carry out minor repairs.

It makes perfect sense to me. Funds are going to be a bigger and bigger part of the private rented sector in the next decade.

This is part of what is wrong with the property sector in Ireland (BTW, this is not directed at you Coyote). People give out about property companies buying up large amount of "units" in estates or apartment blocks. But they won't look to sell the apartment in the near term or take it back to live in themselves. However, they will run the renting of the "unit" as a business and will increase the rent by what they are allowed to every year. Whereas a private landlord is more likely not to increase the rent to keep a good tenant. Now you'll get people giving out about the annual increase in rent.

 

[NoRegretsCoyote]

People give out about property companies buying up large amount of "units" in estates or apartment blocks.

I think politicians give out a lot.

I think tenants don't really mind.

I lived once in a block in single ownership and it was my best landlord ever. No risk of termination of tenancy, you could move within the complex if needs changed, excellent customer service, etc.

However, they will run the renting of the "unit" as a business and will increase the rent by what they are allowed to every year. Whereas a private landlord is more likely not to increase the rent to keep a good tenant.

Am not sure it's so simple. Rent increases are capped at 2% and will be for a long time. A private landlord might be less likely to increase rent but also less likely to provide a good service and much more likely to terminate tenancy to sell or take back themselves.