Saturday 23 February 2019

Dublin 1: Properties at lower end of D1 market performing best

6 Rutland Cottages, Rutland St Lr in Dublin 1 was sold in July for €225k by Sherry Fitz City Centre
6 Rutland Cottages, Rutland St Lr in Dublin 1 was sold in July for €225k by Sherry Fitz City Centre

Property values in Dublin 1 are up by an average of 5pc with properties at the lower end of the market (priced at under €320,000) definitely performing best. Value growth in the last 12 months has been just under half that achieved the previous year because of an increase in the number of properties coming to the market, affordability issues as the Central Bank's lending rules become more of an obstacle, and significantly less demand from investors.

One-bedroom apartments have increased by most with prices rising from an average of €215,000 a year ago to €242,000 today, an increase of over 12pc.

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Growth was slower in the mid-range, with properties priced between €325,000 and €400,000 attracting less interest, and properties priced over €400,000 showing the least value growth. Indeed this segment has been flat since last spring.

Dublin 1 is still relatively affordable, and the growth in value of one-bedroom apartments in particular, is evidence of a strong rental market in this segment, which is still somewhat attractive to investors, as well as to owner-occupiers for whom it is cheaper to buy than to rent. Rents are up 7pc.

Local agent Owen Reilly says that first-time buyers were active in the market in Dublin 1 during 2018, and that 60pc of sales were made to that cohort, up from 50pc the year before. Many investors are now buying through their pensions, encouraged by the strong rental market.

Mr Reilly notes that the growth of the private rental sector (PRS) in Dublin has started and will continue to have an impact on the market in Dublin 1. By way of example, he cites the Dublin Landings development by Ballymore, where 268 apartments are now for sale in one lot. Reilly believes that it is likely that all remaining apartment developments in Dublin 1, whether planned or already under construction, will now be sold in one block to an institutional investor.

Though this will help alleviate pressure in the rental sector, it does mean that owner-occupiers do not have the opportunity to buy in these developments. Meanwhile, it is notable that despite the large amount of new office space completed and occupied in Docklands during 2018, not one new apartment was delivered.

Mr Reilly is predicting increases averaging 5pc, with one-bedroom apartments again likely to show the biggest hike. The continuing development in the Northern Docklands means that property values in Dublin 1 are likely to show higher-than- average increases in value for some time to come.

Irish Independent


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