Thursday 24 May 2018

Dublin West County: West Dublin down 2pc after unsustainable rise

62 Elmbrook Crescent, Lucan, Co Dublin. Sold for €336,000
62 Elmbrook Crescent, Lucan, Co Dublin. Sold for €336,000

The West County Dublin area is among the only markets nationwide to experience a decrease in prices through the last 12 months with values slipping by two percentage points.

However this came after a record run in the year previous when prices ratcheted up by a seriously unsustainable 19pc.

David Lewis of Sherry Fitzgerald Lewis is predicting a single-digit increase in the year ahead. There is plenty of demand for property in the area, he says, and particularly for large period houses in Lucan.

Last year, he reports, the market was very strong in the first quarter, level in the second quarter, more difficult in the third quarter and very difficult indeed by the end of the year.

"The banks have more discretion in the early part of the year in terms of the flexibility they can apply to 15pc of the mortgages that they issue. By the middle of the year they had used up all that discretion."

Lewis sees the housing market in the coming years becoming more like the car market, with the first few months of the year being the busiest.

"The big issue for the year ahead," he says, "will be immense homelessness. I think we have only seen the tip of the iceberg so far."

Lewis says that the increase in homelessness is due primarily to two factors. On the one hand, he says, prospective first-time buyers are finding it difficult to satisfy the new Central Bank requirements and are renting for longer, which puts "massive pressure" on rents .

"The difficulty," he says, "is not so much with the 20pc deposit but with the three-and-a-half times' salary mortgage restriction."

Also, he says many landlords are exiting the market, meaning that there are fewer rental properties available. Lewis predicts a crisis in the spring and summer.

Lewis is not impressed with the government's proposals to deal with the problem with modular housing units, and worries that the areas where these homes are located will turn into ghettos.

"I think the government should buy apartments in parts of the country where there is a stock of low-cost housing, and use those to accommodate people who are homeless. These modular units will cost €85,000 each, but you can still buy homes of the same size in parts of the country for €25,000."

At the lower end of the West County market, Lewis says cash buyers are still in the game.

"Investors are getting good returns on one- and two-bedroom apartments. You could pay €160,000 for a two-bed apartment and get a rent of €1,250 per month now, whereas a year ago the rent would have been €1,100. For somebody with that sort of money lying around there is a real dilemma as to what to do with it. If they don't want to play the stock market or buy an apartment in Spain, they might as well buy an apartment here, as they'll get a better return on their money than they would by leaving it in the bank."

In Lucan, Lewis says that the new homes in Rokeby Park are now the most prestigious in the town, with 2600 sq ft detached houses with big gardens starting at €680,000. Formerly, the most sought-after development in the area was Laraghcon.

Irish Independent

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