Blog post by Owen Reilly, April 8th 2016
The residential property story of the first quarter of 2016 (Q1 2016) has played out against global economic uncertainty that unsettled an otherwise positive local economic story, the continuing housing shortage and an inconclusive General Election that put paid for the time being to any potentially motivating government intervention. Not surprisingly, market reports on the first quarter document low stock and rising prices. The property website myhome.ie reported that the stock of properties listed for sale on their website during the first quarter was down 6% annually; the CSO’s Residential Property Price Index (that does not include cash purchases) informed that transaction prices in the year to February rose 8% nationally and 4% in Dublin (the latter are still 37% lower than at their highest level in 2007), and myhome.ie report a 5.3% year on year price increase in Dublin.
Competitive market throughout South Dublin and Dublin’s city centre
We see our clients continuing to be strongly affected by the Central Bank’s 2015 regulations on residential mortgage lending and the low levels of new housing stock coming onto the market, and we continue to see a very competitive market in our operating area of South Dublin, Dublin’s city centre and Dublin’s Docklands. A summary of our sales transactions has highlighted an average sale price increase of almost 5% over the first quarter of 2015, while the average price per square meter increased by 7% on the fourth quarter of 2015 and by a massive 16% on the first quarter of last year; the actual average price per square meter that we achieved during this first quarter was €5,381 (€500 per square foot).
Docklands continues to perform strongly
Stock is undoubtedly low in Dublin’s Docklands (we have been in the Docklands since 2008 and we have never seen stock levels this low), and sale prices continue on a very strong trajectory. The highest sale price we achieved for one of our Docklands clients during the first quarter was €670,000 – for a two-bedroom, duplex penthouse at the Hanover Quay complex at Grand Canal Dock in South Docklands. The average price per square meter that we achieved for the Docklands area was €5,695 (€529 per square foot) – very strong by comparison with the overall Q1 2016 South Dublin average of €5,381 (€500 per square foot). The highest price per square meter we achieved in the first quarter in the Docklands was €7,714 (€717 per square foot) for a corner, south-west facing, two-bedroom apartment at Millennium Tower at Grand Canal Dock.
A tale of investors and brisk sales
During the first quarter 53% of our buyers overall and 73% of our Docklands buyers were cash investors, while Irish buyers represented 73% of the market. We saw sales cycles slow marginally to an average of ten weeks in Q1 2016 from an average of nine in the fourth quarter of 2015 however, sales were still brisk and particularly so in the Docklands: two apartments at the Forbes Quay apartment complex (pictured) in Grand Canal Dock were sold within a week and two weeks respectively; two others were sold at the Hanover Quay complex at Grand Canal Dock and Alexandra Quay at Ringsend within three weeks.
We remain positive about the market and expect price growth in Dublin’s city centre and Docklands and prime areas of South Dublin; there is no doubt however, that the market is a challenge for buyers and we look forward to more stock becoming available. The stabilising influence that the formation of a government will bring will help and, in my opinion, the much-discussed designation of a cabinet minister responsible for the property sector has become a real necessity.
Owen Reilly, April 8th 2016