Thursday 5 December 2019

Galway City: Cash buyers have been busy busy

Shortage and a fast recovering economy saw Galway City turn in a very strong 10pc increase in its values in the 12 months to date.

It is estimated that less than 100 new homes became available through the last year amidst a market still filled with cash buyers looking to spend. With little predicted to change in these circumstances and tempered by increasing flows of credit from the banks, even stronger increases of 12pc are predicted for the coming year.

For some property types, the increases were even higher. Colm O'Donnellan of O'Donnellan & Joyce saw a handful of particularly scarce property types move well above the 10pc bar through the year, with bungalows in town adding 15pc as "big demand" from an increased number of buyers met with few enough examples for sale.

The bungalow, once the staple of one-off new builds outside the capital, has been fast falling out of favour in recent years for new builds to be replaced by semis and detached two-storeys on the outskirts or by two-storey detached properties. Owners tend to stay put for life and so fewer examples have been coming to market for those who want them.

Also making a big jump up in value (but coming from a low price base) were the two-bedroom former Corporation houses - viewed as a less attractive choice in the earlier years of the recovery but now increasingly seen as an affordable option for a young family - these types saw values surge up 15pc from €80,000 this time last year to an average worth of €92,000 at the moment.

Despite this being the third successive year of double-digit percentage growth in the Western Capital, family three- and four-beds are still regarded as being reasonably affordable at €220,000-€275,000.

Unusually for a city, cash buyers are still dominating the market here, accounting for more than half of purchases in the past 12 months. According to O'Donnellan, many of these are rural-based Irish investors looking for properties in the €100,000-€150,000 range and so they are directly competing with first-time buyers who are having an increasingly tough time pinning down a home as a result.

Rents in the City of the Tribes surged on the back of shortage with 15pc increases being the most average on turnover of a lease or on review. Meantime banks which have been processing stressed and repossessed properties have now moved down from bigger portfolios to concentrate on sorting out the smaller holdings of the crash's stricken "mom and pop" buy-to-let landlords. Stressed sales and crash legacy properties will remain a big aspect of Galway City's market for the coming year.

Over the last two years Galway has also been the sales base for the biggest rolling "monster auction" sessions to take place outside the capital. O'Donnellan and Joyce put 280 properties up for sale through the last year at intervals in rapid-fire sessions and with a success rate of more than 85pc.

The pool of buyers and those able to raise a mortgage increased significantly as one big employer after another announced plans to take on hundreds of new positions at their Galway city bases - among them IIR 50, Docusign, EssentalSkillz, IDT911 and Supermacs.

At the same time returning emigrants laden with cash from sales of properties abroad (notably the UK) or with savings accumulated through the years since the crash spent working in Australia, Canada, the UK and the USA; are also now an increasingly common aspect of the Galway City market. Many of these have been jostling with urgency alongside newly confident wealthy local business folk and executives from multinational businesses for high end property - a factor which saw Galway's best detached period homes shoot up above all other types - by 20pc in the last 12 months.

It means that traditionally sought-after high brow locations like Taylor's Hill are experiencing stiff competition for good properties at the moment. But period homes in Salthill are seeing the most competition of all at the moment and are therefore the property type O'Donnellan believes will surge most in value this year.

Irish Independent

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