Housing market surge now spreads outside capital
* Family homes in most demand
* More rural houses now selling
Published 28/10/2013 | 01:55
SOARING demand for quality family homes is driving the growth of the property market in cities outside the capital.
While demand in Dublin has been strong for some time, sparking warnings of a second housing bubble, the market has been stagnant elsewhere.
However, an analysis of the Property Price Register by the Irish Independent shows a surge in activity across the country, with demand particularly pronounced in Dublin, Galway and Cork, which is resulting in a sharp increase in prices.
The analysis shows overall demand for housing has increased year-on-year, and prices are on the rise in six counties.
Estate agents say that after years of a dormant market, cash buyers are returning in numbers and are seeking good-value quality homes – but demand is outstripping supply.
One agent said six cash buyers might now bid against each other for a single property if it is in the right area of Galway, where prices are rising.
A home in Dalysfort Road, Salthill, was sold in August 2011 for €290,000. The same house, which has planning permission for a 30sqm extension, sold for €400,000 in March this year – a 37pc increase.
In rural counties, the analysis reveals the number of sales is increasing, albeit from a low base, but prices generally have continued to fall. It shows:
* The number of properties sold so far this year is 17,495, a 7pc increase on the same period last year.
* The highest growth in sales is in Roscommon, up 44pc, followed by Leitrim (42pc) and Longford (40pc).
* Sales have fallen in five counties, with the sharpest drop in Wicklow where only 582 properties have been sold, down 25pc.
* The average house price stands at €132,636, down 3pc.
* The sharpest rise is in Dublin, up 17pc to €332,252, followed by Laois (€112,170, up 17pc) and Louth (€155,599, up 10pc).
* In the capital, prices are up in Dublin 6/6W, Dublin 13 and Dublin 14 but down in Dublin 9 and Dublin 13.
* Prices have risen in Rochestown and Bishopstown in Cork, but fallen in Castletroy and Dooradoyle in Limerick.
* In Galway, the high-demand areas of Knocknacarra and Salthill have increased. There was a slight fall in Renmore.
Estate agent Colm O'Donnellan, of O'Donnellan and Joyce Auctioneers in Galway, said that for the first time in five years there was a property market in Galway.
Salthill and Knocknacarra are proving the most popular with buyers looking for three- and four-bedroomed homes.
However, although demand has shot up significantly in the past six months, this did not suggest there was a bubble.
Mr O'Donnellan said: "Salthill and Knocknacarra were always extremely sought-after locations, but for the past five years nobody has been building anything there. The demand is huge.
"We're finding that when a property does go up for sale, there are five to six bidders."
The highest demand was for family homes, which were in short supply.
"It was evident there was always a market for these areas, even in the recession. The last house we had in Knocknacarra had eight bidders on it," said Mr O'Donnellan.
He said the higher end of the Galway housing market was also experiencing a boost. A five-bedroomed detached house in Taylor's Hill saw interest from six cash bidders before selling for €720,000.
Mr O'Donnellan said that investors had also returned to Galway, with apartment sales on the rise.
"Up to six months ago we had no investors, but they're back," he said.
"They're taking their money from the bank where they see no real return and putting it back into property."
In Dublin, where activity has been returning to the market for some time, there have been warnings of prices overheating.
Sherry Fitzgerald chief economist Marian Finnegan said the shortage of stock was fuelling prices.
In July, only 4,502 units were for sale in the capital – about six months' supply.
"That's incredibly low – there should be two years' supply in a normal market," she said.
"That generates price inflation. There's people going after the same houses and that's being mirrored in a number of other locations. In Galway, about 1.6pc of the stock is available for sale, so there's tight supply which is pushing up prices. It's where Dublin was about a year ago.
"About 1.9pc of the housing market in Cork is available, which again is low.
"There are loads of reasons why there's nothing to buy – if you bought with a tracker, there's no incentive to move. If you're in negative equity, you have a problem. There's also nothing being built."
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(Green = rising, red = falling)