Robert Shortt blogs ahead of tonight's item on what is currently happening in the Dublin property market:
A cold, dark November night may not the best time to view a house.
An unlived-in room has a lonely feel at the best of times. But when the cold night is pressing in, it can take a leap of imagination to imagine the pitter-patter of little feet inhabiting a new home.
Unless of course, the estate-sale semi is a rare opportunity to escape escalating rents and get a foothold on the property ladder. Unless the last time you saw a house like this you were gazumped by one of the mysterious cash buyers stalking the property landscape. But wait a minute…this is Dublin 2013. Unemployment is still over 13%. The Troika delegations have just settled their mini-bar bills.
So what’s going on?
I turned up at a recent viewing of a standard, three bed semi in Booterstown in south county Dublin. It’s been on the market for three weeks with a price tag of €550,000. And in property-speak, it would ‘benefit from modernisation’. According to the estate agent, there are already three bidders and the bidding is up to €535,000.
There were about a dozen parties at the viewing. All had stories of being outbid. There was a certain nervousness about what seemed to be happening in the south county Dublin property market; a sense that bargains from a depressed market were fast slipping away.
Is south county Dublin caught in a 2006 time warp? Well not really, if you consider the outer constellation of craziness that was 2006. Prices are still half, or just under half of what they were then.
Here’s what the statistics say: The annual increase in Dublin property prices in the year to September was just over 12%, according to the CSO. Prices in the rest of Ireland are still falling, albeit at a slower rate of 2.5%. It’s clear that prices in Dublin have taken off and left the rest of the country behind.
And within Dublin, it’s even more striking that asking prices in south county Dublin were up 12.7% while in North County Dublin they were up just 1.4%. According to the Daft.ie House Price Report, the average asking price in the north of the county was €210,765 while the average asking price in the south of the county was €370,650. It’s a remarkable disparity.
TCD economist Ronan Lyons, who analyses the Daft.ie data believes the spike in prices is a once-off phenomenon. He thinks it’s principally based on the pent up demand from a generation which through luck or circumstance did not purchase during the boom. They’re forming their own households now, starting families.
They are also getting squeezed in the rental market, which has gone up an average 8% in the capital.
And there’s not a sufficient supply of houses in the areas in which they want to live. Negative equity has restricted the supply of family-sized homes to estate sales and, to a lesser extent, bank sales.
Few new homes are being built.
Prime Time, RTÉ One, 21:35