Sunday 18 March 2018

Cork City North Suburbs: Job announcements aid north Cork's recovery

2 Falcon Hill, Montenotte, Co Cork. Sold for €500,000.
2 Falcon Hill, Montenotte, Co Cork. Sold for €500,000.

Recovery began here three years ago and has been steady and strong since. Through the last 12 months prices have hiked by around 7pc across the board, almost as strong as the previous year's 8pc value increases.

For the most part, agent Michael O'Donovan of Savills believes increases of 8pc have occurred at the middle and upper ends of the market through the last year to date while lesser value increases in the order of 5pc and 6pc took place at the lower end.

The leafy stretches of Blackpool, Mayfield and Sunday's Well - not to mention Montenotte - offer homes which contrast greatly with the modest corpo built terraces of Knocknaheeny; thus giving Cork's north suburbs a hugely varied section of property types which pull averages up and down depending on where you are located and make life tough for any agent crunching the numbers.

A big driver of the mid to upper end market has been adult children who are returning to the suburbs in which they grew up in the hope of purchasing a home. The bank guarantees and often the financial support of reasonably well-to-do parents mean that those seeking homes in the middle to upper class locations are getting access to loans and finances in greater numbers.

"In the north suburbs supply has been reasonably good with a lot of sellers bringing their homes to market to sell as they relocate elsewhere for work purposes," says O'Donovan. "A lot of property at the top end also came to market, particularly in the latter end of last year."

So while supply continues at a reasonable level, job announcements by big proximate employers like Apple mean that demand will continue to pick up, particularly around Sunday's Well, Knocknaheeny and Hollyhill. Going forward however there is little or no land becoming available for new housing development in the year ahead.

However some drag on price inflation has been emerging here. As prices rise, the middle and upper end is becoming increasingly subject to the Central Bank's lending restriction thresholds. At the same time, cash buyers are now slowly starting to peter out of the market, with most having spent their cash over the last two years - the very smartest acquiring their homes here early in 2013 when the market hit bottom and took off again. O'Donovan feels these factors will lead to slower price growth, but only just, in the year coming.

Meantime like many Irish city locations which have international firms in situ, increasingly affluent international circles of executives from abroad tend to mix together for evening entertainment and word of mouth in these circles begins to produce preferred locations.

Recently O'Donovan has noticed an increasing preference for Montenotte among the upper end buyers from these circles, a factor which, along with relative scarcity, is likely to see this suburb perform strongest in the year ahead.

Not all property types are likely to do well this year. Large period two- and three-storey-over-basement period buildings are hanging in at around €475,000 and are unlikely to increase in value in the year ahead with many judging them too expensive to refurbish for a family home purchase. Banks are also more reluctant to lend for such work. It's likely, therefore, that they'll remain worth much the same a year from now.

And regarding smaller homes, two-bed former Corpo homes are likely to hit the €100,000 mark this year while three-beds will range towards €120,000, with family demand for cheaper homes likely to remain steady.

Meantime with fewer cash buyers about, two-bedroom apartments are predicted to rise at a slower rate of 5pc, also taking them closer to the €100,000 mark.

The small house type likely to produce the greatest increase through 2016 is the regular three-bed terrace which is expected to lift in value by around 7pc to take it well over €140,000.

Irish Independent

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