Three-tier property market emerges as recovery spreads
A three-tier property market is developing, according to a new study which says that prices outside of Dublin have surged 6.2pc in the past year.
Sections of the country are now following the capital towards a price recovery, said the Real Estate Alliance (REA), which is made up of 48 firms.
The network of agents employing professional chartered surveyors nationwide reported a "mini boom" occurring largely since mid-January.
Outside Dublin the average viewing numbers have jumped by 84pc while supply has increased by 11.5pc. The average time it takes to sell a property has fallen by 40pc.
According to the REA, the nation's property market can now be graded into three tiers with Dublin experiencing an overheated market in which prices are increasing by 20pc.
The 'second tier' includes the major population centres of Cork city and county and Galway city (up 15pc) along with counties Wicklow, Meath, Kildare, Louth and Laois.
This segment also includes significant population centres in Sligo, Mayo, Leitrim, Kilkenny, Offaly and Carlow.
The second-tier locations described by REA have for the most part seen price hikes in the order of 10pc compared with March 2013 but with most agents stressing that the bulk of this improvement has come since mid-January this year.
Finally, in the lower tier, come parts of the country where oversupply has ensured that property prices continue to fall, remain static or else experience tiny upward movements.
According to REA these locations include Longford (minus 5pc), Donegal, Cavan, Monaghan, Wexford, Waterford, Roscommon, Limerick (no change) along with Tipperary (up 1pc) and Clare (up 2pc).
Much of the unexpected lift in markets outside Dublin have been credited to a rapid improvement in bank lending.
"What it shows is that we are now moving from a two-tier market to a three-tier one for the first time, with Dublin, a large commuter ring and large urban areas nationwide, and then the rest of the rural areas all showing different levels of positive activity," said Philip Farrell, CEO of REA.
"Our agents are reporting an increase in supply of 11.5pc, with average prices for closed sales rising by 6.2pc on the spring selling period last year – the bulk of which has happened since mid-January.
"Each property is now attracting 13 viewers on average, up from seven in 2013, and this has enabled some agents to organise block viewings – something we haven't seen since the boom.
"Our survey also shows that the average time it takes for sale agreed has dropped from 17 weeks in 2013 to an average of 10 in 2014. We are seeing an increase in bank-funded buyers on the ground, which has led the previously strong cash buyers figure to drop from 70pc to 56pc of the market.
"In larger urban areas nationwide there is a release of pent-up demand as people begin to make moves to secure property in desirable areas."
But Mr Farrell added that it was not all good news.
"While there is an increase in activity overall, there are still some counties which are slow to perform price-wise. This is due to over supply and a lack of demand and the fact that many of these areas just don't have the same amenities that many urban areas provide."