Thursday 17 October 2019

Dublin 2: Higher end slows in D2 but smaller units sell by the block

3 Pearse Square in Dublin 2 was sold in July for €928k by Lisney Leeson St
3 Pearse Square in Dublin 2 was sold in July for €928k by Lisney Leeson St

Dublin 2's market is emerging from a very mixed year with properties priced under €400,000 showing value growth of 6pc. In contrast, high end homes are worth much the same as they were a year ago with many shedding early value gains through the last six months. The apartment market around the €600,000 mark was particularly challenging, with supply up by 41pc compared to 2017.

"Affordability is a big factor," says local agent Owen Reilly. "First-time buyers want out of the rental market, and they are going for properties to purchase at the lower end. In the mid-market, investors have been reticent since the summer, despite the strong rental yields.

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"Prices generally were higher in the spring than at the end of the year - there was a little overheating early on followed by some corrections. In the last six months of one or two buyers were interested in each property rather than three or four. "In D2, 44pc of our buyers were owner-occupiers, up 10pc on 2017. Around 76pc were Irish and 75pc were buying with cash funds. On the other hand many of our vendors were landlords exiting the market. They are not being replaced by other landlords, which means there is less available rental stock than there was a year ago."

Reilly says that there have been some strong sales of penthouses in Grand Canal Dock (25 Gallery Quay achieved €1.555m) but generally prices at the luxury end of the apartment market softened during 2018. "Buyers don't see value. Would-be downsizers to high-end apartments found it more difficult to sell their own houses."

On the other hand, many houses sold well. Reilly says that there was a lot of interest in a three-bedroom house at 133 Pearse St, which sold for €755,000 - more than €100,000 over its asking price.

Looking ahead into 2019, he is predicting that lower end homes up to €350,000, will increase in value by 6pc, with the mid- and upper-end properties increasing by no more than 3pc. Mr Reilly says that the PRS (Private Rental Sector) block sale is likely to start impacting the market in 2019. "At 6 Hanover Quay (120 apartments) the entire sold as a single block with an average price of €800,000 per apartment. That's a game-changer and many developers changed strategy as a result. Now, going forward, it looks as if every apartment development is going to be sold in one block. Though this will help alleviate pressures in the rental sector, it means that owner-occupiers don't have the option of buying. Meantime not a single new apartment was delivered in the Docklands despite the office space being completed and occupied."

Irish Independent

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