Attractive returns to entice investors
It is no longer appropriate to measure the Irish property market in totality as there is a growing divergence in performance between mature Dublin/ Cork suburbs and the rest of the country.
The Dublin/Cork suburbs are experiencing strong demand while the rest of the country may see further price falls as predicted by Fitch .
There is certainly an overstock in many rural areas and prices have not been adjusted to realistic levels. Hence, yes, there may well be further price falls until demand matches supply. The upper end of the market has more or less reached its bottom and is now preforming. Correctly priced and well located properties are generating healthy competition with some even selling at above their asking prices.
Our research shows the market is now back about 60pc in Dublin depending on the location and around 70pc for the sale of apartments.
Carmel Coen, branch manager at Savills Central Dublin, goes on to say, "There are also signs of slight increases in certain good residential/family orientated locations in Dublin where there is a lack of quality properties coming to the market.
There is significant demand from people who held off buying during the boom years, or those who sold around the peak and have been renting since.
"People who are buying family homes in good locations constantly tell me that they intend to stay put for the long term. This type of buyer is generally cash-rich when buying and are willing to go that little bit further for their dream family home to ensure that it will meet their needs over the long term," she adds.
I believe that reduced returns on deposit savings accounts, due to lower rates and higher taxes, have resulted in an increasing number of people investing their savings in rental properties. This is where there are good returns to be had – with yields of up to 10pc no longer being that unusual.
The Government also provided an incentive in Budget 2012 for anyone who buys an investment property in 2012 or 2013 and holds onto it for seven years or more, that they will not be liable for capital gains tax when selling the property – a move that is definitely encouraging people to invest.
Harriet Grant is head of Savills' country department