Monday 18 February 2019

Cork City West Suburbs: West city suburb values are shaped by loan rules

Millcove House, Model Farm Rd, Cork was sold in September for €925k by Sherry Fitz Cork
Millcove House, Model Farm Rd, Cork was sold in September for €925k by Sherry Fitz Cork

Three-bed semis in the west city suburbs have broken through the €300,000 value barrier to hit €310,000 today, up from €290,000 this time last year and representing a hike of 7pc. At this point, Central Bank lending limits are being reached for many potential buyers with average easrnings in the west suburbs.

Overall values are up by 8pc to date in this market according to our local experts Savills, although there are wide variations depending on home type. These west city estates are a good indicator of how lending restrictions can warp a local market, with cheaper homes now adding high percentage increases. At the same time, larger, more expensive properties have turned in much smaller increases; or their values have stalled altogether.

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For example, at the very top of the market, detached homes with their own grounds are worth an average of €1.2m for the third year running. This may in part have much to do with Brexit having eliminated buying from wealthy British buyers in Cork and also causing nervousness among workers who make the weekly commute to the UK.

Tiny value increases of less than 1pc followed for four-bedroom detached homes which moved up in value from €582,000 to €585,000.

In contrast, three-bed terraces, which were selling well within average loan reach, increased values from €158,000 to €180,000, a rise of 14pc.

But the big anomaly, according to Michael O'Donovan of Savills, has been the rocketing in prices achieved for two-bedroom apartments through the last 12 months. The average two-bed is now valued at €165,000, up from €140,000 a year ago. There is a dual action at work here. A certain amount of local first-time buyers priced out of three-beds are turning to apartments instead but an even bigger upwards pressure is now being exerted by foreign buyers coming to work in Cork with a slew of multinationals and state institutions; many of which are based in or near the locality with big tech names like Dell EMC as well as the University and the hospital in proximity.

Those from European and American cities are especially attuned to apartment living.

More of the same is expected in the west suburbs in the year ahead with rise of up to 8pc predicted by Savills.

Irish Independent


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