Cork City Centre: First-timers flock to city
The big news in Cork's city centre this year is the influx of suburban- born first-time buyers in search of smaller houses - in particular, two- and three-bed period city terraces in good condition.
It means that prices have been increasing faster in the city centre (10pc) than in the suburbs through the last 12 months. It also means that apartments - the usual source of buyer competition in the centre -are being beaten by a nose in the most-popular-property stakes by various small houses, mostly of a period vintage. A year ago, it was apartments all the way.
Cork's suburbanites, particularly those from the northern 'burbs are a load of homebodies. Traditionally, they'll be insistent on buying back into the same locales they grew up in. But according to Michael O'Donovan at Savills, the worsening of second-hand supply issues and the lack of new schemes in the suburbs has turned their focus to smaller city-centre houses. Agents estimate that supply has been so poor that transaction levels overall are down by around 9pc since this time last year.
"You never really saw too many first-time buyers in the city centre until recently. What's happening here is that they are becoming less fixated on location and more interested in getting a foot on the ladder at all. So they're prepared to buy city terraces instead of a three-bed semi in the suburbs - for now. Down the road, they'll likely move again towards where they are from." More available funds for lending also mean these owner-occupiers can stretch to a city-centre house rather than an apartment for first base.
Also fuelling demand for city-centre houses is the increased number of Corkonians returning from abroad (largely the UK) and more recently from Dublin. This has mainly been down to improved employment opportunities on Leeside. "As you might expect, the returning buyers are very determined and focused to find a place and they are regularly outbidding investors." A typical chase might feature three owner-occupiers and one investor, with the investor likely to be an under-bidder. With bank lending continuing to improve, first-time buyers continue to turn the tables on investors, who were dominant in the city centre until two years ago. For their part, the investors have kept within the realm of apartment properties, where they still currently account for around half of all purchases.
For the most part, the first-time buyers are now more interested in houses and, as a result, apartments which surged in value ahead of the posse in recent years have not risen in value by as much as other apartment types through the last 12 months. Better lending means the FTBs can afford city houses. It also means that the fewer number of three-bed semis to be found in the city centre have leapt in price in the last year from €230,000 to €260,000.
However, FTBs are largely after homes in good condition only and are generally ignoring rundown properties, which are for the most part being bought by builders and investors as projects.
Almost no new development took place in the city centre in the last 12 months. There might, however, be some movement on Western Road in 2017, thanks to the sale of a site of just under an acre (formerly the Western Bar), which went with full planning permission for 50 apartments. Overall, however, it means that those looking to rent in Cork city centre are coming up against real problems. The Elysian, at Eglinton Street - Ireland's tallest building - has 211 units and had stood empty for many years after the crash. Today, two-bed apartments here are renting for €1,400 to €1,500 per month. It is estimated that rents will increase by 10pc in the city centre through 2017 while prices are likely to hike by 9pc.
O'Donovan says the hottest spot to watch will be Albert Road, off Capwell Road, a neat street with lots of early-1900s two-bed houses and good backyard space. He estimates that further office occupations at 1 Albert Quay nearby and other commercial development in the vicinity will cause prices to rise highest here in 2017, as large numbers of new workers seek homes close by.