Dublin office market risks vacancy rate rising to as high as 26% in coming years, Central Bank warns

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Market continues to be subject to significant uncertainty

The Central Bank has warned that Dublin office vacancy rates could spike to as much as 26 per cent in the next two years in a severe scenario, as the market continues to be subject to significant uncertainty.

‘I remember what it was like to count my pennies. Money allows me to live a life I’ve always dreamed of’“Certain secondary, non-prime markets are likely to be particularly vulnerable to considerations around energy efficiency.” The domestic banks currently have €12 billion of commercial property loans on the books, equating to about 10 per cent of their portfolios.

“More broadly, market intelligence and transaction data suggest that a meaningful proportion of CRE assets are likely held by, or funded by, overseas entities on a cross-Border basis. While more international investor participation, which has been a feature of global CRE markets for many years, can increase risk associated with capital inflows and a more amplified asset price cycle, it also mitigates domestic financial stability risks through risk-sharing mechanisms when shocks hit.

However, rising geopolitical tensions mean further shocks are possible, creating a particular concern for an open, highly-globalised economy like Ireland.

 

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