Tax changes to spark revival of property prices
PROPERTY prices look set to stabilise and even increase in some sectors of the market following the Budget changes and the expected spur of a further 0.5pc cut in mortgage rates today.
This turnaround will come as a surprise, following the recent ESRI forecast that prices would have further to fall next year.
But some experts are not surprised and point to segments of the market, notably key city and farming sectors, where prices are stabilising and may increase in 2012.
The ESRI recently forecast that prices could fall 55pc from peak and it is clear that some sectors have further to fall.
However, small pockets of the market are beginning to show slight signs of stability if not recovery. These include upmarket Dublin 4.
For instance, in the Ailesbury and Shrewsbury Road areas, cash-rich investors recently called the bottom of the market by shelling out more than €36m for seven houses.
One of these buyers was the astute investor, JP McManus, who snapped up developer Bernard McNamara's mansion for around €9.5m.
That was the top price on the road after another less lavish house sold at an Allsop Space auction in July for over €2.3m
Similar signs of stability and recovery have been seen for some city-centre apartments after the Central Statistics Office recorded that Dublin apartment prices have fallen about 60pc from peak.
The recent Allsop Space auction showed that over the six months between its April and November auction, prices for Castleforbes apartments in the north docklands have shown signs of firming up.
At the peak in 2005 one-bed apartments in the development started at €290,000 but by the time of the first auction in April this year they had fallen to between €116,000 and €129,000 -- a drop of more than 55pc.
Simon Ensor of Sherry FitzGerald expects that foreign investors will be enticed to buy whole blocks of Irish city apartments following the Budget's tax exemption of sales profits from those investors who buy before the end of next year and hold on to them for seven years.
The farm land market has also seen increased buying activity and Edward Townshend of Colliers reckons prices for good land have risen by 10pc this year to around €11,000 an acre.