Cork City Centre: Office schemes bring new buyers to Cork's centre
PRICES in Cork city centre have risen by 5pc through the past 12 months, slightly less than the 6pc experienced the previous year. This leaves the value of the average home standing at €228,000 compared with €217,000 a year ago. The continued rate of increase reflects the fact that Cork City Centre is still seeing growth in new commercial activity, thanks largely to ambitious new office schemes recently completed or now underway.
More workers based in the centre has led to a greater demand for homes both to buy and to let. It means that two-bed apartments have just pushed through the €200k ceiling for the first time since the crash and three-bed semis are set break through the €300k barrier some time this year.
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According to Michael O'Donovan of Savills in Cork, there has also been a general increase in interest in city centre living as a lifestyle choice, particularly among first-time buyers who have been getting younger (mid to late-twenties) thanks to enhanced employment prospects in the city centre and a particular willingness by the banks to favour them for loans up to €300,000.
While there were almost no new homes developed in the city centre through the last year, big bold new office schemes like Navigation Square (310,000 sq ft) are doing their bit to bringing more workers into the area.
Other new commercial schemes include a huge development underway at Penrose Quay by John Cleary's JCD Group. There's a new Maldron Hotel while Park Place Technologies is to open its new European, Middle East and African headquarters in the City Quarter.
Home sales here are being driven by those who have already been renting in the centre, have new confidence in their circumstances, and want to stay put. These include foreign-born workers who have relocated to Cork for jobs with international firms.
Favourite property types for younger buyers include the two-bedroom apartments found in newer schemes and older two and three-bedroom terrace houses. With no room for new builds save for redevelopment potential in a few 1970s buildings, rents are now rising steadily in Cork city centre.
At this point the location could likely do with a few big apartment blocks going forward. There are no vacancies today at the swishy Elysium Tower and its surrounding blocks, a favourite for big firm workers and those interested must now go on a waiting list.
More than any other building it perhaps demonstrates Cork city's rapid return from the crash. Once Ireland's tallest empty building, it is now owned by Kennedy Wilson with a "super landlord" trend moving across the main cities. In the Elysium, two-bed units here will now set you back €1,500 per month. Investors are coming back into the city centre market but there's a different profile with pension funds now coming to the fore rather than small investors.
The City Council too has been making its presence felt, buying here for social housing. Whereas buyers for the council had been falling out of bidding processes last year, they have been more resolute through the last 12 months and more successful in their purchases.
The values of larger period houses in need of work have remained stagnant for the third year running thanks to a reluctance of banks to lend combined with a fear costs enforcing heritage rulings. While dereliction is not yet a concern, their case will need to be addressed soon.