Mortgage caps hit Dublin house price growth
Gunne Residential owner predicts small price rises over the next year, writes Gavin McLoughlin
The Central Bank's new mortgage caps have contributed to a sharp slowdown in Dublin house price growth, according to the owner of one of the capital's major estate agents.
Marian McQuillan of Gunne Residential said she expects "very small" increases in Dublin in the next 12 months.
"The recovery started in 2012, you had price increases in 2012, 2013 and 2014. I would say prices increased by at least 40pc during that period of time. Since 2015, the increase has slowed down, if not just stabilised. I would say the market has stabilised," Ms McQuillan told the Sunday Independent.
"If you asked me why, I would say a number of reasons. Affordability is one. I think that will be the trend going forward in the market, now that it has reached a stable level at the minute.
"The Central Bank rules came in and had an effect. I know everybody talks about the 20pc deposit, but in my opinion it's as much linked to the three-and-a-half times your income as anything else."
Her comments chime with a report released by Lisney on Thursday, which said the Dublin residential market "entered into a settling down period towards the end of 2014, following significant price inflation earlier in the year.
"The ending of the CGT waiver for investors, plus the introduction of the Central Bank's new rules on mortgage lending, also had an impact.
"Consequently, 2015 got off to a slower start, with about a third fewer residential units sold in Q1 compared to the last three months of 2014," the report said.
Ms McQuillan said a large number of foreign buyers are snapping up properties in Dublin 4.
"We see it in Dublin 4 a huge amount, more the expat who has an Irish link, who is living abroad, be it in Singapore , a lot of London people, some people living in the States, in Europe, coming back in Dublin 4 looking for a base - and they would all be cash buyers."
The company will shortly be rebranded as 'Quillsen', Ms McQuillan said. "The Gunne family haven't been involved with Gunnes' for almost 10 years now, so it was always originally agreed that the name would change at some stage - and I suppose now we feel it's the correct time.
"Obviously we've been through six difficult years there, where the property market had slumped down, whereas now we feel it's a new era, we're really excited about it. Business is back, so we've now decided it's the right time. The business, the company, the look - it all needed a fresh impetus."
She said the company will look to expand modestly by opening one or two more branches. Ms McQuillan also said the number of houses coming to market in Dublin had increased.
"The price rise has brought the people who bought in 2003 and prior out of negative equity, that means they can sell and if they wish to trade up, they're doing that. We're seeing quite a lot of investors who are selling as well, so I think the supply in terms of second-hand will continue.
"New-build, I think, is still below where it needs to be. I saw some reports that said last year there were around 11,000 houses built throughout the country, whereas we probably need to have at least double that."
Sunday Indo Business