Real Estate Update: 2019 in Review – Ticking Along Nicely
05 December 2019
We saw strong activity in almost all sectors of the market in 2019, particularly in the private rented sector and in the Dublin office market. Brexit was postponed again in 2019 and national house price inflation continued to slow, but neither had a significant adverse effect on overall market activity. We review factors which impacted real estate activity in Ireland in 2019 and look ahead to the coming year.
High demand continues in the residential market for most parts of the country although there were indications in 2019 that the long-running ‘housing crisis’ in Ireland was beginning to ease. Continued strong government activity in the social housing sector has meant that the social housing market has continued to grow in prominence.
The emergence of a number of proposed co living schemes in Dublin made headlines in the media in 2019. Co-living is a relatively new concept in Ireland and would represent a significant departure from the traditional Irish preference for low-density housing. We assessed the potential impact and legal background to such schemes here.
Residential Tenancies Acts
2019 saw a further significant expansion of and changes to the Residential Tenancies Acts which govern residential tenancies in Ireland. These changes included:
- Changes to termination rights and notice periods
- The introduction of limitations on short term lettings
- An increasing of the Residential Tenancies Board’s investigations and sanctioning powers
- Changes to registration requirements
- An expansion of the residential tenancies legislation to cover student specific accommodation
Our detailed review of the changes to the Residential Tenancies Acts can be reviewed here. We assessed the developments in respect of short term lettings and rent control areas here and we reviewed the current position on deposits under the Residential Tenancies Acts here.
Commercial leasing activity remained strong across most sectors in Ireland in 2019 and during the year we reviewed one timeless issue, subleases, and one relatively new one, wellness and the WELL certification. We reviewed the dangers of a sub-par sub-lease in Ireland here
Commercial lease negotiations are increasingly becoming focused on negotiation of BER, LEED, BREEM and WELL and other such energy efficiency and wellness certification standards. We assessed the relatively new WELL certification here
The legal effects of Brexit on the Irish real estate sector appear to have been limited to date.
A UK case this year relating to the attempted surrender of a lease due to Brexit was a timely reminder of the potential impacts of Brexit on real estate law. We reviewed this decision here There were developments in the case following our article but the European Medicines Agency ultimately dropped its appeal so the initial decision has effectively been upheld.
Developments in real estate transactions
As the real estate market continued to perform well in 2019, we reported on a number of issues that affected asset sales and acquisitions.
2019 saw a continued growth in the use of ‘overage’ or ‘anti-embarrassment’ agreements or clauses in the real estate market. These are agreements that seek to protect sellers of property from a substantial price uplift on a further sale of a property within a short period following completion where certain specific conditions are met. We reviewed the issues surrounding these agreements here
A controversial commercial rates law also nearly came into effect in 2019. We analysed the potentially problematic effects of this law on the conduct of commercial sales and acquisitions here This legislation has not yet been commenced and the Irish Government has since accepted that parts of the legislation are contrary to the intention of the Government. It will presumably be appropriately amended before being commenced.
It seems very possible that Brexit will finally become a legal reality in 2020 which may still result in a WTO terms exit for the UK at the end of the year. While this is likely to have adverse consequences for the Irish economy as a whole, in the short term the Irish real estate market may receive a benefit.
Residential lending restrictions imposed by the Central Bank of Ireland appear to be affecting demand in the residential sector and national house price inflation continued to slow in 2019. There appears to be a wide political acceptance that lending restrictions are here to stay but it seems possible that these rules will be loosened in the future.
If you would like to discuss your real estate interests and potentially impacting factors in 2020, contact a member of our Real Estate team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.