Huge Dublin property surge sparks frenetic bids
A shortage of homes in hotspots sees asking prices beaten by 20pc
Published 25/08/2013 | 05:00
FOUR out of 10 houses sold in Dublin are executor sales following the death of the owner, reflecting an acute shortage of houses for sale that is driving prices up.
It means that potential buyers are waiting for homeowners in certain prized areas to pass away before they can land the house of their dreams.
The new figures obtained by the Sunday Independent last week reflect an acute shortage of family homes in parts of the capital that has ramped up prices by as much as 20 per cent this year in "hot" areas – a far higher increase than official figures released last week that do not include houses bought for cash.
Banks will not allow homeowners with tracker mortgages to transfer their 'golden handcuffs' home loans to other properties.
This means many of the 375,000 homeowners on trackers have opted to extend or renovate their properties rather than trade up.
One tracker mortgage holder told the Sunday Independent: "We were thinking of moving home and not even seeking to borrow more – but we were told that we would have to come off our tracker. It wasn't the only factor in us staying put – but it made a difference."
A huge number of homeowners are trapped in negative equity, which means that growing families are trapped in smaller homes and cannot trade up as their family expands.
In the capital, this has resulted in frenetic bidding for houses in many key locations both north and south of the Liffey, including apartments.
On the northside a triangle stretching from Glasnevin to Drumcondra and down to Marino is particularly hot, while substantial three- and four-bed family homes in Clontarf are also highly prized.
On the southside, Dublin 4 including Sandymount, Ballsbridge, Donnybrook, Ringsend and Irishtown; and Dublin 6, including Milltown, Ranelagh, Rathmines and Rathgar; and stretching west to Harold's Cross, Templeogue, and Terenure, are in high demand. Other areas of South County Dublin and parts of Wicklow have also experienced considerable price increases.
Aoife Brennan, head of research with estate agents Lisney, said the Dublin 4 and Dublin 6 areas had increases of 18 per cent in the last year, with demand highest for three- and four-bed homes.
"There is such a shortage. Our research showed that in Dublin 4 at the end of July there were only 91 houses and 76 apartments for sale – a fall from 258 houses and 125 apartments for sale in July 2011," she said.
"I would say that 40 per cent are executor sales – and then there is the issue of tracker mortgages and negative equity."
On the northside, leafy Clontarf is witnessing the largest jump in prices.
Trina Beakey, of Douglas Newman Good in Fairview, said: "I would say it's 15 to 20 per cent up in the niche market of three- to four-bedrooms that are near schools and transport and on mature roads.
"There's a big shortage in Clontarf. The stock available for sale is down 50 per cent year on year. That's why that small pocket in Clontarf is surging ahead.
"We had a house for sale on Kincora Avenue last week, a nice four bed that went on the market at €650,000 and we have agreed a sale very close to the guide. Because there is a shortage, people are pouncing straight away and making good bids.
"Our typical property now is a probate sale where the house hasn't been updated in 20 years, but people are not being deterred. Very few people are selling to trade up. If they bought in the last 10 years then they are in negative equity and those on trackers won't move and lose it."
Other areas on the northside experiencing a boom in prices include Drumcondra, Glasnevin and Marino.
Vincent Kelly, of Kelly Bradshaw Dalton, said: "In our view it's an 11 per cent increase and up to 13 per cent for high end, well-presented properties since November last year. Our figures are based on point of sale, what is happening now, whereas any figures you get from the Central Statistics Office or the Property Registration Authority are based on sales that were agreed last February but are only closing now.
"There is huge demand in Drumcondra for three- and four-bed family homes. We had a house on Home Farm Road where 111 people turned up to view the property. We showed a property on Walsh Road in the same area and we had 32 people interested. It is now, as we say in the trade, 'under offer' in excess of the guide price of €350,000.
According to the latest Residential Property Price Index, published by the Central Statistics Office last week, residential property prices in Dublin grew by 3.3 per cent in the month of July 2013 and were eight per cent higher when compared with the 12-month period to July 2012.
But these figures don't reflect the reality. Aoife Brennan of Lisney said the Central Statistics Office figure of an eight per cent increase in Dublin would be far higher if the index covered the whole market.
"At the moment the figures are only based on mortgage draw-downs. In the first three months of this year 68 per cent of purchases were cash purchases," she said.
"That segment is being ignored in the official statistics so you are not getting a full picture of the market. At least half of all properties are being bought for cash."
Buyers also venture outside the capital
THE latest surge in property sales and prices started out in the suburbs of south Dublin and spread across the city.
Now as the supply of houses in the capital dries up, it looks as though it could be spreading to surrounding counties within striking distance for commuters. Having only been put on the market with an asking price of €270,000 last Saturday, this 750 sq ft cottage in the north Wicklow village of Delgany has, according to its estate agent Gabriel Dooley, already attracted five bids from among the 25 viewers who came through its front door so far.
Mr Dooley claims to have an offer in the region of €320,000 – or some 30 per cent above the asking price – for the cottage's vendors to consider.