'No homes' for middle earners in capital city
Long queues and 'bonus bidding' drive prices up in desirable areas
Middle-income earners are being squeezed out of the Dublin property market, as prices continue to soar in the capital, a Sunday Independent analysis reveals.
Homes in middle-class residential areas such as Drumcondra, Cabinteely, Dun Laoghaire and the South Circular Road are exceeding asking prices for the first time since the property crash.
In contrast, luxury trophy homes worth in excess of €1m are still struggling to meet their asking prices, while sales of lower priced properties in council estates are varying widely.
But in middle class areas, the sight of large numbers of house hunters queuing for open viewings has returned for the first time since 2008.
Rowena Quinn, the owner of Hunters Estate Agents, said that just "two to three years ago" she would have been lucky if a dozen viewers turned up to an open viewing – or if she received a single bid for such properties.
But, she told the Sunday Independent: "Now we would expect up to 50 people to turn up in an hour."
She added: "It's definitely because of a lack of supply. Every house now, we have one, two or even three bidders."
A study by Myhome.ie last week revealed that spending on property in the capital had jumped by 34 per cent last year to €3.6bn.
Evidence has suggested a two-tier property market, with Dublin prices on the rise while prices across the rest of the country remain stable.
A Sunday Independent examination of the Residential Property Price Register shows that homes in middle-class areas have begun to reach their asking prices – and exceed them by more than 5 per cent.
An example of the emerging trend was found in the St Alban's estate on the South Circular Road, where the asking prices of two-bed terraced Victorian residences have soared in the past two years.
In October 2011, number 48 sold for €250,000, a considerable €40,000 reduction on the €290,000 asking price.
But in January this year, number 64 sold for €410,000, just shy of the €415,000 asking price, while number 19 is currently on the market for €525,000.
The trend has continued into the suburbs of south Dublin and the register showed that there were quick profits to be made by the eagle-eyed buyer.
In The Park, in Cabinteely, number 10A on Sycamore Close was sold for just €200,000 in April 2013, before it was re-sold for €328,000 just six months later.
On the north side of Dublin, the desirable Clonliffe Road area of Drumcondra showed a similar pattern.
Number 243 was purchased for €350,000 in March 2011, far short of the €470,000 asking price the year before.
In contrast, number 128 was purchased for €262,000 in June 2013: a €17,000 increase on the €245,000 asking price six months before.
The phenomenon of upward pressure on prices in middle-class areas over the last 18 months has been explained by a shortage of supply and a growing demand.
Ms Quinn said this has been helping to drive sale prices beyond the asking.
"It's not because we have got the asking price wrong, it's because of bonus bidding, where a number of bidders are driving the price up," she added.
Economist Ronan Lyons of Daft.ie added: "Whereas around two years ago you might expect to get (a property for) the asking price minus around 10pc, now it's the asking price plus around 5pc.
"The tallies with what you have seen. In a lot of cases the asking price hasn't changed. It's down to a lack of supply."
However, the phenomenon of reaching or exceeding asking prices has not been mirrored when it comes to luxury trophy homes. It is difficult to compare values year-on-year, due to the unique nature of such properties.
However, estate agents are still falling significantly short of achieving asking prices, especially when compared to moderately priced homes.
The most high-profile sale of such a house recently was Deepwell, one of the most expensive houses to come on the Dublin market in recent years. The former family home of the late John Reihill, of Tedcastle Oil, had an asking price of €10m in May 2013. But the massive 5,748 sq f Victorian pile achieved a sale price late last week of just €8m – a full 20pc less of the asking price.
The Abington estate in Malahide – which at one time included singer Ronan Keating and disgraced former Anglo chief David Drumm among its residents – was the county's first purpose-built development for millionaires.
Millionaire buyers could find a new house in the area for sale with a price tag of €2.45m. But no house in the area has sold for more than €1.8m in the last four years.
In fact, both prices relate to number 50, which was owned by Mr Keating and his wife Yvonne prior to their high-profile separation last year.
Brynogue, on Westminster Road in Foxrock, sold for just under €3.5m in August 2012, though it had a price tag of €4.5m.
"In that end of the market you are usually dealing with cash buyers. It's very specific to the buyer and the property," Mr Lyons added. A comparison between asking prices and sale prices in working-class areas was more inconsistent.
In December 2010, number 32 Annamoe Drive, in Cabra on Dublin's north side, sold for €229,000, down from an asking price of €300,000 six months previously.
Number 57 on the road sold for €105,000 last December, despite being on the market for €129,950 just three months earlier.