Friday 24 March 2017

House prices in parts of Dublin to fall 5pc - but rises due in rural areas

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2016 is expected to be the most lacklustre year for property in Dublin since the recovery began
Mark Keenan

Mark Keenan

House prices in parts of Dublin will fall by as much as 5pc in 2016 in what will be the most lacklustre year for property in the capital since the recovery began - but will rise up to 11pc in other areas, estate agents believe.

A nationwide survey of estate agents' expectations for this year shows that double-digit rises are predicted in rural counties including Leitrim (11pc), Monaghan (10pc), Roscommon (10pc), Cavan (10pc) and Donegal (10pc).

The strongest predictions for price rises are mostly apparent in those areas that have been slowest to recover from the crash.

Significant rises of more than half a per cent per month are expected in Kerry (9pc), Kilkenny (9pc), Clare (7pc), Cork County (7pc) and Louth (6.5pc).

On average, agents are predicting an increase of 5.6pc nationwide. But Dublin house prices will fall by as much as 5pc in some parts of the city - overall, estate agents expect prices in the capital to rise by just 0.3pc on average in 2016.

The Real Estate Alliance (REA) network asserts that south county prices are expected to fall by 3.5pc in 2016. By contrast, agents predict that prices in Dublin city centre and the north of the county will rise by around 1.5pc.

Among the reasons listed are the effects of rising rents on savings towards deposits and punitive mortgage deposit rules for second-time buyers.

And as investors continue to exit the rental market, agents have predicted that rents will rise as much as 10pc in 2016, further excluding people from saving deposits to get on the housing ladder.

The combination will cause prices to drop most in areas such as Tallaght and Rathfarnham, which are both predicted to shed 5pc of house price value in 2016.

Agents in Meath have predicted a rise of just 1.5pc on average, with Navan and Ashbourne both expected to experience zero growth in the coming year.

"Our agents in Meath are predicting that unless there are changes from government there will be no improvements next year," said REA chairman Michael O'Connor.

"They are seeing at first hand how difficult it is for developers to access finance and also to build at a profit."

Agents in Kildare, who say they experienced price falls towards the end of 2015, are predicting a maximum of 3.5pc growth in 2016.

"We are seeing predicted stagnation in towns like Newbridge, which are still affordable commuter areas with average prices at €195,000, due to the fact that there are no new estates coming onstream," said Mr O'Connor.

"Where there is any new building taking place, there are suitable properties to purchase or there is value for the first-time buyer, then agents' expectations are higher."

Agents in the three main cities outside Dublin are optimistic, with rises of 10pc predicted for Limerick city, 7pc for Cork city and 3pc for Galway.

Irish Independent

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