This article was published in national media.
InRento, the platform for crowdfunding investments in buy-to-let projects, is expanding its activities by entering a third foreign market – Ireland. According to the company's CEO Gustas Germanavičius, the country's growing economy, rapidly increasing immigration and overall population have created favourable conditions for investment in rental projects in Ireland.
"In addition to the opportunities currently available in Lithuania and Poland, we chose Ireland because we see the need for alternative real estate financing in this country. This is due to the Irish banking environment, which is uncompetitive and has limited capital for property lending. Although bank lending for property development in Ireland is slightly cheaper than in Lithuania, it is not readily available," says Mr Germanavičius.
InRento first project in Ireland is a residential building in Galway, which offers fixed annual interest rates starting from 9.5% p.a.. A 51% loan-to-value (LTV) ratio ensures investor security and projects are selected according to strict conservative financing standards.
Reasons for rapid growth
Perhaps the main reason for the current strong demand for property in Ireland is demographics. Ireland's population has grown from 4.5 million to 5.3 million in a decade, and this spring saw the highest annual number of immigrants in 17 years. The proportion of young people (under 15) in the country's population structure is also the highest in the EU at 19.3%.
"Ireland is also experiencing strong economic growth. Its GDP is forecast to grow by 3.6% in 2025, compared to 1.6% for the European Union as a whole. The economic expansion is underpinned by Ireland's favourable tax policy, which attracts technology and pharmaceutical companies employing highly skilled professionals. The unemployment rate in Ireland is currently below 5% and the number of people in employment has grown by 3.4% per year over the last decade. This has led to a huge surge in demand for housing," says Germanavičius.
Why supply cannot meet demand
Despite a strong economy and a growing population, house building in Ireland is not yet able to keep up with the huge demand and the construction sector faces serious challenges. According to various estimates, around 20 000 new housing units need to be built in the country every year, but only 10 000 are actually built, leading to a severe shortage of property, especially in the major cities.
Ireland is currently one of the governments with the highest housing expenditure, increasing it from €1 billion to €6.5 billion a year to address the housing shortage, and has initiated the Housing for All programme, which aims to build at least 33 000 new homes a year.
"Despite this, the country has a complex and lengthy building permit process. Compared to countries such as Poland and Lithuania, where the permitting process for property projects is faster, in Ireland the process is slower and often difficult to predict. This means that new projects cannot be delivered quickly enough and the housing shortage is exacerbated," says the CEO of InRento.
All this leads to high property prices. In 2022, they were more than double the EU average, and in the 12 months to July 2024, prices jumped by 9.6%. This makes it even harder for the average working person to buy a home, especially in Dublin and Cork, where property prices are highest.
Rental market growth and investment opportunities
Rental yields in Ireland are rising strongly due to the persistent housing shortage. The average gross rental yield in the third quarter of 2024 was 8.10% compared to 7.85% in the first quarter. The second largest city in Ireland, Cork, is generating the highest returns, with a rental yield of 9.08%, compared to 7.13% in Dublin. These indicators show that the Irish rental market has become one of the best destinations for both domestic and international investors.
"In addition, rental projects such as shared living spaces and rooms in larger properties are becoming increasingly popular due to high house prices. Such projects offer investors the opportunity to earn higher returns, as young people and middle-income families often choose to rent rooms rather than the whole house," says Mr Germanavičius.
Stepping into Ireland as part of international expansion
"InRento's activities in Ireland are part of a wider international expansion strategy. The platform has already become the largest rental finance platform in Lithuania and has the largest portfolio in Poland among the crowdfunding platforms. It is expected that more than 50% of the company's project financing will be abroad next year.
Since its launch in 2020, the platform has not had a defaulted project, and the average annual return on completed projects has exceeded the forecast. "InRento's success has also been recognised internationally, with InRento being named Best Investment Technology in Europe for the second time at the 2024 European FinTech Awards.
Investing involves the risk of losing part or all of the amount invested, so it is advisable to diversify your investments and invest responsibly.
