BLOG Observations on Dublin residential in Q2 2016

Blog post by Owen Reilly, July 27th 2016 

For the first time since the start of the decade, reports on the property market have incorporated words like ‘healthy’ and ‘improved conditions’ and ‘stability’. Nationally, prices are reported to have continued to increase in the second quarter (Q2) by between just 4% and 6.9% – depending on which report you read – while property website reports annual inflation in Dublin house prices overall is now just 1.1%. Underlying this more normal price growth is the much-reported low level of housing stock for sale. Reported by housing website to be down 6.7% annually in Q2, low stock is the big story and, while construction remains slow, the current low level of houses for sale is still driving prices up and driving consumers to new locations. However, our clients’ experience has been positive and, despite the gridlock, we have seen good results.

Prices up in prime Dublin areas and Dublin 2 continues to outperform the city

While prices overall in Dublin have slowed, we have observed strong demand and strong prices and fast sales in South Dublin, Dublin’s City Centre and Docklands. Our average listing price for a home in Dublin was €560,217 compared to average listing prices of €517,719 in South Dublin and €346,794 in Dublin’s South City according to The house Price Report while, in Dublin 2, our clients’ average listing price for an apartment was €502,500, almost two times the average listing price for a home in Dublin’s City Centre. Our clients have realised increased transaction prices across the Dublin market in Q2 with over 4% variance above asking in Dublin 2. Compared to €5,188 (€482), the average price per square meter/foot that we observed across Dublin as a whole, a top price per square meter in Dublin 2 of €7,576 (€704 per square foot) was realised for a two-bed waterfront apartment at The Waterfront in Grand Canal Dock. We observed the average time on the market drop in Dublin 1 and 2 to ten weeks, with the time falling in Dublin 2 to six weeks, comparable to this time last year. The same two-bed waterfront apartment above was agreed in three weeks.

Mortgage buyers still in the market but investors dominate Grand Canal Dock    

Undoubtedly the Central Bank’s regulations in connection with mortgage lending have subdued price increases however, given the transaction prices of the properties we have been dealing with, it is somewhat surprising that we dealt with increasing numbers of mortgage buyers in Q2: overall, 43% of our listed properties were bought with mortgages; this decreased to 23% in Dublin 1 and 2 and to 0% in Dublin 2. In Grand Canal Dock we observe that investors are dominant; in Q1 88% of the buyers with whom we dealt in relation to Grand Canal Dock were investors and in Q2 investors accounted for 100%.

With an improving economy and net inward migration set to increase, low housing stock will imply more of the same as we have now – prices continuing to rise and consumers continuing to be pushed out of certain markets with detrimental implications for the wider economy and society. The government’s recently-launched housing plan is focused primarily on providing social housing; additionally, it is focused on motivating private sector construction to provide the varied housing stock that is needed and wanted by the market. For our clients who want to sell and move, for our clients who want get into the market, and for those who want to trade up or want to trade down, we would like to see it succeed.

Blog post by Owen Reilly, July 27th 2016