Friday 13 December 2019

Cork City Centre: Apartments the primary driver in city

9 Fernhurst Terrace, College Road, Cork. Sold for €462,000 by Savills.
9 Fernhurst Terrace, College Road, Cork. Sold for €462,000 by Savills.

IT'S "steady as she goes" in the Cork City centre market where price increases in 2016 are expected to push ahead by 7pc this year, mirroring last year's picture exactly, albeit with slightly different drivers.

Apartments hailed the beginning of the recovery in Cork City centre back in mid-2013 when big investors suddenly began hoovering up whole blocks at the rocky bottom of the market. Apartments also led the activity through the last 12 months.

Owner-occupiers have now shifted the balance against investors to a 60/40 dominance of purchases, says Michael O'Donoghue of Savills. This time last year the end of Capital Gains Tax relief saw a fall-off in investor activity but this demand gap has largely been filled now by the emergence of a newly-aggressive foreign born buyer - usually European executives moved here to work with companies like Apple or EMC who are now planning on putting down some more permanent roots in bricks and mortar.

Shortage and a lack of building has generally increased competition for apartments and has also hiked up rents - the other big story on Leeside. The two-bedroom apartment which rented for €900 12 months ago crashed through the three-figure barrier in 2015 and is now letting at €1,100 as we enter 2016. There is now a definite shortage of high quality apartments in particular.

Meantime many first-time buyers have joined the renting masses in town as they save for a semi in the suburbs, having being knocked back by the Central Bank's lending restrictions which have also impacted on mid-priced homes here.

There is evidence to suggest that the price gap between mid-market properties and entry-level properties has been closing somewhat. This is happening because demand is increasing for the more affordable homes both to rent and live in while potential buyers are standing off the more expensive homes in order to save up newly required larger deposits.

Apple's announcement of 1,000 new jobs during the year is also expected to impact positively on prices in the city centre apartment market in 2016 as recruitment gets going in earnest. On the downside, increasing levels of city traffic as more people go to work, has been a continued negative factor.

The availability of finance has improved somewhat through the year and this in turn has driven price increases for second hand two- and three-bed terrace homes which are a favoured target of younger couples and single buyers who don't want to drive.

The only slackers in the city centre are the large three to five-storey-over-basement period properties which have proved just too "old school" for office use while at the same time just that bit too expensive to renovate for family buyers. The average price was €450,000 last year, it remains €450,000 now and according to our agents, is unlikely to change again by the end of 2016.

Irish Independent

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