Property Pad

1st April 2015

“Notable moderation in house price inflation in Dublin”

By Sherry Fitz.

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Statement by Marian Finnegan, Chief Economist, Sherry FitzGerald Group
Sherry FitzGerald House Price Index
Wednesday, April 1st, 2015

Key findings;

  • The average value of residential property in Ireland rose by 1.7% in the first quarter of 2015, this compares to growth of 5.0% in the same period in 2014.
  • Dublin house prices rose by a moderate 0.9% in the first quarter of the year, this compares to growth of 6.5% in the same period in 2014.
  • Notably, when Dublin is excluded from the national figure, the quarterly growth figure was 2.8%.  In comparison, residential property outside Dublin grew by 3.0% during the opening quarter of 2014.
  • The regional centres outside Dublin experienced strong price growth during the opening three month period, most notably in Cork with price growth of 3.0% in the three months to end March.
  • An analysis of the stock available for sale on the open market revealed there were 30,642 units advertised for sale in Ireland in January, which represents 1.6% of the private housing stock.  This compares to 37,883 units in January 2014, a 19% reduction in the country overall.
  • In Dublin, there were 3,982 units advertised for sale in January 2015, which represents 0.8% of the private housing stock. However it in interesting that this represents a 32% increase on available stock in Dublin in January 2014.
  • The Property Price register reveals that just under 43,000 properties transacted during 2014.  If one excludes multi-family/portfolio sales, the figure is reduced to approximately 41,500 or 2.2% of the private housing market.
  • Owner occupation still dominates the purchaser profile at 73%, while investors now account for 20% of all purchasers in the quarter.
  • First time buyers role in the market diminished further during the opening quarter accounting for 14% of the properties traded in the quarter; notably this compares to 17% in the same period in 2014. 
  • An analysis of the profile of vendors who sold their property through Sherry FitzGerald in the quarter revealed that 36% of vendors were selling investment properties, while executor sales accounted for 11% of the market.

 

Commenting on the results, Marian Finnegan, Chief Economist Sherry FitzGerald said; “There is no doubt on reviewing the performance of the Irish housing market in the opening quarter of 2015 that the market is operating differently than it did during 2014.  There may be a myriad of reasons for this depending on where you are in the country, however there is also every reason to believe that the Central Banks’ intervention in the market in January 2015 had a role to play in the market’s performance in the intervening period.

The Irish housing market grew in capital value terms by 16.3% during 2014, however during the opening quarter of 2015 the pace of price growth slowed to 1.7% in the three month period. The reduced level of price growth was most notable in Dublin where price growth slowed to 0.9% during the quarter. That said, capital value growth in the Dublin market had begun to moderate in the closing months of 2014.
 
Notably, when Dublin is excluded from the national figure, the quarterly growth figure was 2.8%.  In comparison, residential property outside Dublin grew by 3.0% during the opening quarter of 2014. This suggests that the Dublin market is cooling more notably than the rest of Ireland.
 
Of particular note during the first quarter was the high proportion of vendors selling investment properties, 36% versus a more moderate level of investor activity at, 20%.  This depletion of the buy to let stock will inevitably put further upward pressure on rents particularly as the year progresses and the demand for rental accommodation grows.
 
In summary, there is no doubt that the Dublin market in particular is cooling after the period of heightened price inflation during 2014.  That said, the fundamentals of the market have not altered significantly with a low supply of available product, only 0.8% of the private housing market available for sale in Dublin and 1.6% in the country overall.  However, there is undoubtedly a more cautious approach to the market from a consumer perspective and as a result the level of price inflation has moderated considerably.



For any further information, please contact;

Jill O’Neill                                                                               
Director of Communication                                                    
Sherry FitzGerald Group                                                        
Ph: 086 252 3277                                                                              

Marian Finnegan
Chief Economist
Sherry FitzGerald Group
Ph: 01 237 6341 / 086-814-8251

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