Cork City North Suburbs: Loan limits see big homes slow and small pads soar
Values in Cork city's northern suburbs have grown by 8pc for the third year in a row - but the difference this time is wide variances in those increases from one home type to another.
Mortgage lending limits appear to be kicking in here, as evidenced by a new value comparison distortion. On one hand, sluggish growth was experienced in the values of larger homes (five-bed detached homes added just 2pc) while on the other, homes under €300k have undergone a boom-era-type price surge.
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Apartments are the big story here with two-bed versions shooting up in value by 18.5pc over the last 12 months alone to €160k. These could have been picked up for just €95k in 2016.
According to the value estimates by Savills in Cork, an even bigger surge has been experienced over three years in the price of smaller one-bed units. These were selling at €75k in 2016 but are today worth almost twice that at €140k having added 17pc over the last 12 months.
Although 2018 was the year in which four-bed semis inched through the €300k barrier for the first time since the crash, it took an increase of just 3pc to get them there. Another indication of loan ceilings beginning to take effect is the fact that more people are now buying homes early on in the year, when exemptions are more readily available.
"Buyers are no longer as fixed on location as they used to be, but rather they are strictly adhering to budgets and are thus more price-oriented. So they'll move all over looking for the best value for their financial limits. While properties are selling well, we're not getting as many bidders as last year," says Michael O'Donovan of Savills.
Conversely increased employment and readily available loans within the lending limits mean that the bank of mum and dad, a big resource around here two years ago, is not being leaned on quite so much. In either case parents who have already helped out one or even two siblings in recent years, are no longer able.
"Three bed period town houses were particularly popular in Sunday's Well, fuelled by interest from executives from firms like Apple and Blizzard. Many who moved here from abroad are now getting settled and looking at putting down more permanent roots following years spent in rental."
New homes have been in tight supply and were popular when launched. Next year will see a number of schemes coming so there won't be issues with supply.
All in, the expected improvement in new homes supply, the impact of lending ceilings on the upper end and the rapid catch-up of apartments through the last 12 months, means Savills is predicting a lesser growth of 6pc for this year.