Home completions rise 34pc as €1.3bn spent by 'cuckoos'

The funds have deployed more than €1.3bn this year to buy a swathe of property portfolios and new apartment developments off plan, chiefly in Dublin.

The quarterly commercial property report by Cushman & Wakefield says institutional investors have spent €638.2m in the first nine months of the year buying residential assets, including last month's €52m sale of a 214-apartment portfolio to Chicago-based Heitman Capital.

The report says these global property companies have also struck deals totalling €697.6m to acquire apartment developments still under construction, with most not due for completion until 2020 or beyond.

The biggest deals this year include the €175.5m paid by US property company Greystar to Singapore-based developer Oxley for the 268-apartment Dublin Landings development on North Wall Quay, and the €94m paid by Starwood Capital unit Urbeo to Cairn Homes for The Quarter at Citywest.

Jonathan Hillyer, investments director at Cushman & Wakefield, said the European Central Bank's rock-bottom interest rates mean "real estate returns continue to look attractive to fund managers across Europe, with Dublin remaining a key city".

"Lack of available investment opportunities across the continent remains a constraint in the marketplace which should see continued robust pricing at least in the short term," he said.

Meanwhile, 15,400 housing units were completed in the year to the end of September, with some 2,500 of these apartments.

The rise in the overall number of housing units completed this year works out at 34pc. But the increase in the number of apartments is 78pc on the same nine-month period last year, according to figures compiled by Goodbody Stockbrokers.

However, sagging sales of new homes may pare back forecasts for the number of homes delivered next year.

Goodbody economist Dermot O'Leary, who compiled the figures, has forecast 21,000 units will be completed this year and 24,000 units next year. But Mr O'Leary said weak home sales could peg back the total built next year.

"With the unsold stock rising due to lagging private new home sales, the risk remains tilted to the downside to our completions forecast of 24,000 for 2020."

New home sales fell 15pc in the first nine months of the year, even though sales outside Dublin rose.

Dublin's commuter belt is contributing most to the growth in new dwellings.

There was a 57pc rise in completions in the commuter belt, with 5,097 units completed in the last year.

The Economic and Social Research Institute is among the agencies which estimate annual housing demand is between 30,000 and 35,000.