It is no longer appropriate to measure the Irish property market in totality as there is a growing divergence in performance between mature Dublin/ Cork suburbs and the rest of the country. The Dublin/Cork suburbs are experiencing strong demand while the latter may see further falls in values as predicted by Fitch and other agencies.
According to Harriet Grant, Head of Savills Country department, “There is certainly an overstock in many rural areas and prices have not been adjusted to realistic levels. Hence, yes, there may well be further price falls until demand matches supply. The upper end of the market has more or less reached its bottom and is now preforming. Correctly priced and well located properties are generating healthy competition with some even selling at above their asking prices.”
According to property experts Savills the market is now back about 60% in Dublin depending on the location and around 70% for the sale of apartments.
Carmel Coen, Branch Manager, Savills Central Dublin goes on to say, “There are also signs of slight increases in certain areas of Dublin (good residential/family orientated locations) where there is a lack of quality properties coming to the market. There is significant demand from people who held off buying during the boom years, or those who sold around the peak and have been renting since. People who are buying family homes in good locations constantly tell me that they intend to stay put for the long term. This type of buyer is generally cash rich when buying and are willing to go that little bit further for their dream family home to ensure that it will meet their needs over the long term.”
Savills says that lowering returns on deposit accounts due to lower rates and higher taxes, have shown an increasing number of people investing their savings in rental properties. This is where there are a good return is to be had – with yields of up to 10% no longer being that unusual.
Harriet concluded, “The Government also provided an incentive in Budget 2012 for anyone who buys an investment property in 2012 or 2013 and holds onto it for 7 years or more, that they will not be liable for capital gains tax when selling the property – a move that is definitely encouraging people to invest.”