Thursday 19 October 2017

20pc price rises seen for some Dublin lots

Ask any prospective purchaser struggling to buy a property in Dublin, particularly those in south county Dublin, if they believe the Central Bank report is correct and they will give you a resounding "no"

Robert Lawson

The recent Irish Central Bank report on the outlook for the housing market is rather curious.

It took a negative view on prices and predicted no recovery country wide until 2014. This contradicts the reality on the ground in Dublin and indeed a Goldman Sachs report on projected international trends.

In 2008 Goldman Sachs examined 15 developed countries that experienced house price crashes since the 1970s.

It defined a crash as a fall of at least 15pc in real inflated adjusted prices. The average decline among the 15 countries lasted more than six years. As it is now seven years since the Irish market started its downturn the international experience would suggest that the Irish market should now have halted the decline.

Ask any prospective purchaser struggling to buy a property in Dublin, particularly those in south county Dublin, if they believe the Central Bank report is correct and they will give you a resounding "no".

In fact, almost without exception, every type and value of property in Dublin is experiencing competitive bidding and resulting in bonuses being achieved on asking prices.

The reality is that the market bottomed out in the first quarter of 2012 and since then family homes in south county Dublin have risen by in excess of 20pc.

For example a house on St Helen's Road, Booterstown that was sold in December 2011 for €555,000 and a very similar house on the same road sold in December 2012 for €670,000, representing a 20pc rise.

While on the north side of the city a house on Willow Park Road, Glasnevin sold for €277,000 in June 2012 and has just been resold for €335,000 representing a rise of 21pc.

This trend has continued and in fact has gathered pace in 2013.

The auction market provides more proof of this fact as it has long been the bellwether for the property market.

Lisney has a long standing reputation of specialising in the auction market and while there has been an understandable aversion to auctions since the top of the market in 2006, we sensed a change in sentiment last autumn and consequently we started to re-enter the auction market in a very limited and selective manner.

This proved very successful in 2012 both in terms of success rate and prices being achieved.

The success has continued in 2013 with over 70pc of properties selling under the hammer with the balance being agreed within a few weeks of the auction.

The average selling price is 20pc above the AMV.

A prime example of the success we have enjoyed in the auction room was Springfield House, Sydney Avenue, Blackrock, a villa style property on 0.7 of an acre.

It had an AMV of €2.5m and sold under the hammer two weeks ago for €2.9m.

This is the highest price paid for a house at auction this year.

However, auction successes are not limited to the top of the market, we also had a very successful auction for 11 Auburn Street, Dublin 7 which had a disclosed reserve of €140,000 and sold for €190,000 representing a 35pc bonus over the AMV.

For a successful auction, sentiment, confidence and the ability to buy must be present because this creates the required competitive bidding.

So the fact that we have been successful in the auction room by extension means the housing market is performing very well despite the negative reports to the contrary.

Robert Lawson is divisional director Lisney Residential

Irish Independent

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