Dublin 2: Lack of supply becomes key factor in pushing up prices
Lack of supply was a key factor in pushing Dublin 2's prices up in 2016. Although asking prices were only slightly up on the previous year (€486 per sq ft in 2016, as compared to €473 in 2015), our assessing agent Owen Reilly saw sale prices up by an average of 8pc, with certain property types achieving growth of 10pc and above.
"Dublin 2 has been very strong compared to the rest," says Reilly, citing the south Docklands, where there were no new apartments built in 2016, and none expected in 2017, as particularly bullish.
"In Dublin 2, 93pc of buyers are investors," says Reilly, "as prices are generally too high for owner-occupiers. After Brexit we saw a number of deals with sterling buyers fall apart as 80pc of investors buy with cash. Just towards the end of 2016 we started to see some owner-occupiers outbidding investors."
Reilly says that apartments built in Dublin 2 in the late 1990s are offering good value.
"You can get a two-bed apartment in the Winter Garden, Westland Square or Trinity Square area for around €275,000, whereas the same apartment in the south Docklands would be twice the price. The older apartments can look a bit tired, but they can be transformed with new bathrooms and kitchens."
In Grand Canal Dock, a severe shortage of supply is having an impact on prices.
"There are only 2,600 apartments in Grand Canal Dock," says Reilly, "which is where everyone wants to be, and 300 of those are out of the supply chain due to well-documented problems at Longboat Quay. Normal supply would see twice the number of apartments changing hands, and transactions in 2016 were down 30pc on 2015."
Reilly is predicting that growth will continue at a steady 6pc.
"The political climate in the US and UK is volatile. For the first six months of the year, I think we will see strong growth, but after that it will be down to macro and micro factors. Prices are still 30pc off peak, though, and those in negative equity would like to see stronger growth. Certain types of property will see greater than average growth - one-bed apartments because they are popular with both investors and first-time buyers and typically only made up 10-15pc of the developments built in the noughties, and three-bed apartments because there are so few of them."