Apartments buck trend in capital as cash-rich investors push prices back up
ONE of the most surprising aspects of the CSO figures is how Dublin apartment prices have performed better in recent months than Dublin house prices.
Apartment prices rose 2.3pc in March and 2.6pc in April.
However, the statistics for Dublin apartments have proven very volatile and the CSO recorded wide fluctuations over the last six months.
For instance, they surged 4.7pc last November and suffered a sharp 6.3pc fall in February.
Over the last 12 months Dublin apartments have also fared better than Dublin houses, which have fallen by an even sharper 17.9pc.
That may seem strange considering the anecdotal evidence that demand is stronger for family houses, but the figures suggest increasingly cash-rich investors may be mopping up apartments.
It also seems many families cannot get the loans to buy houses.
In contrast investors, including those from overseas, are happy to buy apartments in areas of Dublin where rental demand is strong and many of them have to borrow a much smaller portion of the price.
According to Allsop Space, cash buyers have helped boost prices by as much as 6pc across the board as it sold 45 Castleforbes flats at six auctions over the last 13 months.
In April 2011 two-bedroom flats at the Dublin north docklands complex sold for between €140,000 and €190,000 -- a price which included a parking space.
Then 13 months later they were selling for between €155,000 and €173,000 but without parking spaces.
But the question facing buyers is whether the prices will rise even faster should the banks loosen their purse strings and increase mortgage lending.
More than half of the country's brokers report rising demand for mortgages.
Research by the Professional Insurance Brokers Association (PIBA) shows that 55pc of brokers report stronger demand for mortgages.
The figure was 49pc in the final quarter of last year.
Demand is coming from those who believe property prices are close to the bottom and those who believe that it is cheaper to buy than rent.
Meanwhile, PIBA said KBC Bank, Bank of Ireland and Permanent TSB are most likely to reach some sort of agreement with customers who are in difficulty with their mortgages.
Almost 60pc of brokers say banks are coming to arrangements with customers while 40pc say they are not.