Dublin 2: End of CGT exemption slows early market but D2 on the up
Published 23/01/2016 | 02:30
The apartment-filled market in Dublin 2 had a slow start to last year following the expiry of the capital gains exemption which caused a rush from investors.
But as the year went on, momentum and activity built up strongly says estate agent Owen Reilly who estimates value increases of 10pc overall through the last 12 months.
"By the summer there was a pick-up in demand and with a tightening of supply in the autumn we saw some price inflation. The third quarter in particular was very strong."
With a two-bed, two-bath apartment without views of the water now costing around €450,000 in Grand Canal Dock, he tends not to be dealing with first-time buyers.
"You need a big salary to get a mortgage for that type of property," he says.
While Irish families tend to want a house rather than an apartment, Reilly says that non-Irish people have no hang-up about living in an apartment as long as it's big enough.
"I have had zero transactions where Irish families with children are buying apartments, but plenty where existing families, who have had their children while living in the apartment, are trying to move out."
Reilly reports that the values achieved by period properties in Dublin 2 during 2015 were less than the prices achieved at the end of 2014 when they shot up due to the pending expiry of capital gains tax relief.
Since then asking prices have been reduced and haven't yet recovered. Many believe the cost of remedial and restoration work for jaded period buildings is prohibitive at late 2014 price levels.
"The big question in a recovering market," says Reilly, "is whether the recovery is going to keep going. Price is key, and anyone looking to test the market will struggle.
The Docks, meanwhile, remain solid. "With the cranes back and the bars and restaurants busy," says Reilly, "the market in that area is on the rise too. Facebook and Google are recruiting, the SDZ is dominating media coverage, and there is very little coming to the market. The availability of parking is another factor driving values up."