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29 May 2022

Cuckoo funds are pricing families out of housing market

Cuckoo funds are pricing families out of housing market

Families are being pushed even further away from home ownership by cuckoo fund investors, according to a report.

Figures compiled by BNP Paribas Real Estate show institutional buyers paid as much as 32pc more for each residence that they bought last year compared with the average price paid by household buyers in Ireland.

"For the second year in a row, residential property was the leading investment sector," the report notes.

Large investors paid €2.27bn for almost 4,900 private rented sector (PRS) properties in 2021, an average of almost €430,000 a unit.

That is €104,206 more than the average price of €325,502 paid by households who bought homes in the 11 months to the end of November last year. 

The report notes that this represents a 32pc premium over the average price paid by households. 

The financial clout of these investment funds make it difficult for private individuals to compete. 

“Their funding models and investment objectives make them willing to pay high prices to access such secure income streams. Understandably, this is causing frustrations for private buyers who are attempting to compete,” the BNP report adds. 

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