Flows of financial capital into the Irish property market improved somewhat last year, but investment in the private rented sector was little changed, according to a new report from Sherry Fitzgerald.
Overall, capital flows into the market here increased by 13 per cent to €28.7 billion in 2024, after a 6 per cent decline in 2023 from more than €27 billion in 2022, the property agent said on Tuesday.
The residential property market accounted for 84 per cent of total capital inflows last year, Sherry Fitzgerald said, or €24.2 billion, up 6 per cent. Household purchases accounted for €19.7 billion of the total.
Across different segments of the commercial property market, however, 2024 was a mixed year.
Total capital flows into commercial property – including all commercial transactions, development land sales valued at €1 million or greater – were up 75 per cent to €4.5 billion, albeit from a very low base in 2023 when investment fell to the lowest level in a decade amid soaring borrowing costs.
The headline figure was buoyed by a positive year for the hotels sector, where capital inflows reached record levels of €939 million, Sherry Fitzgerald said.
Several high-profile properties changed last year, including the Dean Hotels group and the Shelbourne Hotel in Dublin.
However, excluding the private rented sector, student accommodation and hotels, direct commercial investment increased by 39 per cent to €2 billion, Sherry Fitzgerald said. This was around 35 per cent below the long-term average of €2.7 billion, a spokeswoman for the property agent said.
Investment in the private rented sector stood at €246 million for the year, the weakest level since 2017, according to the report.
Dublin’s moribund office market, in which few deals have been completed since 2022, has dragged significantly on headline commercial property investment levels in recent years. While take-up of office space has improved in the early part of 2025, it remains well below the long-term average, according to separate industry reports published in recent months.
Brian Carey, commercial director at Sherry Fitzgerald, said the market in the Republic is “poised for investment amid “signs of recovery in the office market”.
Jean Behan, senior economist and head of research at the property agency, said there was “significant improvement” in capital flows into the Irish property market last year.
“The outlook for the year ahead is more uncertain, however, as tariffs and future policy changes by the Trump administration weigh heavily on business and investor decisions,” she said.
“That said, borrowing costs are anticipated to ease further in 2025, while the Irish economy is expected to remain resilient.”