Monday 16 September 2019

Dublin 1: Owner-occupiers take cash investors on in bidding war

Average Price: €250,000
Areas: North City Centre, IFSC
2014: + 18%
One Year Forecast: + 10%
Assessing Agent: Owen Reilly Property Consultants

There was a significant increase in activity during 2014, aided by the Capital Gains Tax deadline for investors at year's end.

Agent Owen Reilly says that this was particularly evident in the second half of the year as 'human nature' meant people left things to the last minute - heavy trading was still taking place towards the end of December.

26 North Great George's Street, sold in February 2014 for €280,000.
26 North Great George's Street, sold in February 2014 for €280,000.

Cash investors led the charge through 2013 in search of strong yields but this all changed in 2014, with mortgage led owner-occupiers regularly outbidding them.

In fact the first six months of the past year saw a 50/50 split, says Reilly, who adds that in a bidding war, the mortgage buyer was no longer discounted by vendors when up against a cash buyer.

Dublin 1
House Types201420152016
3-bed Semi,, €250,000 €310,000 €341,000
1-Bed Apartment,, €150,000 €190,000 €209,000
2-bed Apartment,, €210,000 €260,000 €286,000
2up/2Down,, €200,000 €270,000 €279,000
3-bed Terrace,, €240,000 €300,000 €330,000
1-bed Cottage,, €150,000 €200,000 €220,000
2-bed Cottage,, €180,000 €240,000 €264,000
Ex-Corporation 2-bed,, €180,000 €220,000 €242,000
Ex-Corporation 3-bed,, €210,000 €250,000 €275,000
2-bed townhouse,, €200,000 €245,000 €270,000
3-bed townhouse,, €220,000 €285,000 €314,000
2-bed Mews,, €240,000 €290,000 €319,000
3-bed Mews,, €275,000 €325,000 €358,000
Large Period over basement,, €280,000 €345,000 €380,000

Reilly says owner occupiers want views with extra space and are prepared to put a premium on these unlike investors.

"If they have approval in principle with savings ready to go, we're confident to do the deal. That's hugely important".

IFSC: The long standing centre for investors has been attracting owner occupiers with formerly
IFSC: The long standing centre for investors has been attracting owner occupiers with formerly "dead after dark" locations now showing some nocturnal spark

But the end to CGT saw investors swing back into dominance towards the end of last year with cash accounting for up to 75pc of transactions in quarters three and four of 2014.

This end of year cash charge was led by the CGT expiry but not exclusively.

In terms of property types, the one-bed apartment overcorrected most in the downturn with some banks not even lending on these properties in the bad years.

Therefore, it was not surprising that the one-bedroom units have experienced the biggest bounce back on values through the last 12 months.

As in 2013 Asian investors were active enough, but were more inclined to "look, rather than buy."

It was different up around Parnell Square where there was faster movement with 30-40pc of sales to Asian buyers intent on re-developing for apartments within their own communities. Kingscourt proved popular in these instances.

With some sites earmarked for brownfield developments from seven to 15 floors in height, supply is likely to ease in Dublin 1 through the coming year.

These will change the market as well as the landscape and the outlook going forward is more measured. Reilly estimates high single-digit growth for most property types by the end of this year.

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