Wednesday 26 April 2017

Cork City South Suburbs: Posh south city still feeling the supply pinch into 2017

Willowbank, Rochestown Road, Douglas; sold for €920,000
Willowbank, Rochestown Road, Douglas; sold for €920,000

Cork City's posher suburbs felt the supply pinch once again in 2016 and, as we enter 2017, sites which were expected to yield new homes to ease the strain a year ago are still devoid of homes to sell - namely those at Nemo Rangers and Cleve Hill.

There were some schemes, but not many and they were small, such as pocket developments at Mount Oval, in Rochestown, and Hazel Hill, at Maryborough Ridge in Douglas. The latter is releasing a new phase soon of 20 four-bed detached family homes likely to be priced in the mid-€400,000s.

But overall, the small scale of development simply hasn't been enough to keep prices from rising hard.

The lack of houses was the main reason for an 8pc rise in prices in the year to date. A three-bed semi in Blackrock will now cost you in the order of €280,000 to €290,000. Renting the same abode will likely set you back €1,400 per month - very expensive by Irish city standards. A year ago, that same home could have been let for €1,250, and two years ago it was €950.

A standard three-bedroom semi for all of these suburbs has moved up in price from €260,000 to €281,000 in just 12 months, while a four-bed semi has increased from €410,000 to €443,000. Move up to a detached four-bed and we see prices moving from €520,000 for an average version a year ago to €562,000 today.

While most of the market activity for homes in these areas is accounted for by locals trading up and a good mix of more mature first-time buyers from professional backgrounds, around one in five homes is now being sold to native Corkonians coming home - largely from the UK and Dublin. Brexit and the subsequent weakening of sterling has, however, reduced the budgets of those coming to buy from the former market.

Competition means cash buyers are still making up around three in 10 buyers in the south suburbs - much the same as they were a year ago. Two years ago, half of the homes sold here were going for cash.

Considerably more relaxed bank lending, though, means that south-suburban parents have not been called upon to put their hands in their pockets as much to come up with deposits - a big problem since the Central Bank introduced its stiffer lending regime two years ago.

"We are definitely seeing parental assistance on the wane," says Michael O'Donovan of Savills. Good news, perhaps, given that prime houses are now hovering well up around the €300,000 mark.

With little set to change here, prices will likely add another 8pc in 2017 across almost all property types. And once again the predicted property 'hotspot' for 2017 is Blackrock. At the top end of the Cork City market, an 'executive spread' on its own grounds will set you back a cool €1.6m. Homes for €1m-plus are common enough in the better parts of the south suburbs and, at times, Blackrock matches the prices to be found in its Dublin namesake.

That said, prices at the top end have defied the hotter middle- market trends and have remained relatively static through the last three years. That trend looks set to continue for at least another year, despite the improvement in local fortunes.

On the development side, a five-acre site at Churchyard Lane in Ballintemple (formerly Eircom) sold for almost €4m last year, with potential for either a medium- or high-density development, while a 52-acre site at Castletreasure in Douglas is under negotiation - it has potential for a large-scale residential scheme.

However, delivery of homes at these locations is still almost a year or more down the road.

Irish Independent


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