Renters are forced out of capital
Published 24/07/2016 | 02:30
A new property bubble caused by a lack of affordable homes and Central Bank lending rules is seeing the cost of houses rise in areas outside Dublin's commuter belt.
It is also leading to a new and "phenomenal" demand for rental accommodation that cannot be met in the counties around Dublin.
The value of homes on the limits of Dublin's commuter belt is increasing at a higher rate than those closer to the city centre because of availability.
People are also looking to keep the cost of their mortgages down by keeping the value of their properties within the €150,000-to-€220,000 price range and meeting Central Bank loan-to-value rules.
It has created an anomaly in counties around the capital.
In Co Louth, Dundalk house prices rose by 11pc in the past three months, while homes in Drogheda only increased by 2.8pc, despite being 30km closer to Dublin.
A house price survey by the Real Estate Alliance (REA) has found prices rose by 10.5pc in Blessington, Co Wicklow, because of a shortage of three-bedroom semis.
Meanwhile, in Co Laois, house prices have risen by an average of €10,000 as demand increases for homes on the commuter belt's fringes.
In the capital, house prices are also increasing with bidding wars between buyers inflating the value of properties in Rathmines and Kilmainham.
However, it is surrounding counties that are seeing the largest percentage increases.
Drogheda REA agent Gabriel O'Brien said the market outside Dublin cannot meet demand from buyers or renters.
"What we have noticed in the past month or so is greater rental demand from Dublin and north Co Dublin coming up to us.
"The renters are being pushed out as well as the buyers and we have never experienced that before.
"It is cheaper here. A three-bed semi in Drogheda could be €1,250 to rent. A three-bed semi in north Co Dublin is in the €2,000 price range.
"It (the demand) is phenomenal."
With prices soaring in Drogheda in the past 12 months, house-hunters are looking at Dundalk for accommodation solutions.
"We had the increase before Dundalk," said Mr O'Brien.
"Unfortunately, it is down to the fact that people are being pushed further out so now they will have to commute longer distances to work.
"A three-bed semi in north Co Dublin is €335,000 to €340,000, which is €100,000 more than in south Drogheda and east Meath for not much further up the motorway and you don't have to pay a toll, either."