Families forced to buy homes 80 miles away
Published 23/01/2016 | 02:30
Measures designed to cool the Dublin property market have inadvertently caused double digit "knock on" inflation in outlying commuter counties.
Buyers struggling to meet the strict new Central Bank mortgage deposit rules are now moving as far as 80 miles outside the capital to buy in areas where homes fall under €220,000 - the price barrier at which the lending restrictions kick in.
The Central Bank won't be reviewing the controversial rules until the end of this year - later than expected.
'How Much Is Your House Worth? 2016', the guide to all home prices published today by the Irish Independent, reports above average price increases in almost all of the 'outer' commuter belt with many local agents now attributing inflation directly to the bank measures.
Buyers require a €76,000 deposit for an average three-bed Dublin semi priced at €380,000. The report shows Dublin house price inflation, running at 20pc to 25pc last year, is now on average between 3pc and 9pc, with prices in the west county and Dublin 15 actually dropping.
Read more: How to use 'How Much Is Your House Worth?'
But now buyers from Dublin and more expensive commuter counties are inflating prices by competing with locals for property in Kildare south, Laois, Cavan and even as far away as Monaghan.
Prices in Kildare south have soared by 12pc and are now 4pc above the national average, with local agents citing a spill of buyers from the north of the county where the average semi now costs €289,000. In the south of the county an average semi is just €190,000.
"We have always had commuters in south Kildare but they disappeared over the last few years. Now they are gradually returning because of lending restrictions and lack of supply in Dublin," says local estate agent Charlie McDermott.
Prices in Laois, where a three-bed semi costs on average just €120,000, prices are up 12pc - 4pc above the national average. Local estate agent Paul Kelly attributes a good deal of the growth to the Central Bank factor.
"The Central Bank mortgage regulations definitely affected us positively in Laois. We have plenty of properties below the €220,000 threshold so buyers were spilling off from Kildare."
The biggest surprise, however, is Co Cavan where prices increased by a hefty 25pc in the last year. Local agent Tony Breathnach cited Dublin commuters as a key reason for the price boost.
Remarkably, agents in Monaghan, which is 80 miles from Dublin and where prices rose 12pc, again cited the presence of Dublin commuters.
It's not a good time to trade down because lower priced homes are in short supply.