Is 2017 the year of no homes to go to?
Ireland's most comprehensive survey of prices shows calm in the capital, heated hikes in regional cities and a big Brexit bump, writes Mark Keenan
IN a reversal of fortune, Ireland's trophy home locations of Dublin 4 and South County Dublin - in which the country's most prestigious abodes are found - have ended up being among Ireland's flattest property markets as we enter 2017.
Our annual snapshot of house prices by local markets shows that, despite perceptions, inflation remains largely contained for a second year running in the capital. This is thanks to the continued effects of the Central Bank's lending restrictions.
Restrictive loan-to-income ratios and prohibitive 20pc deposit requirements for second-time buyers mean that house-price inflation in Dublin is running at an average 6pc, even despite recent tweaks to favour first-time buyers, chronic shortages of stock and soaring rents. Only one Dublin market - Dublin 8 - saw hikes above 10pc (it hit 13pc).
Homes in North Wicklow (which includes Enniskerry and Greystones) rose in value by just 3pc in the last 12 months, while Dublin 4, 6W and 18 all ratcheted up very mild increases of 4pc. The South County Dublin area, which includes the 'rock broker belt' of Dalkey/Killiney, Blackrock and Dún Laoghaire, saw price increases of 6pc and below the national 8pc average.
While new home construction is starting up slowly in Dublin's suburbs, it still lags well behind demand. But it is almost non- existent elsewhere. Shortage has become the single biggest issue everywhere, according to our local experts. This kicks all the way down the housing chain and has ultimately caused homelessness.
Second-hand homes are also being sold in smaller numbers (stock is a quarter of what it should be) thanks to a perfect storm of discouraging factors for vendors. Thousands of owners are still on tracker mortgages, which they lose if they trade up or down. With prices still holding at 30pc or more below peak, thousands more home-owners are also suffering from negative equity and can't move even if they want to. Finally, in the ultra-competitive market for smaller homes, those hoping to trade down are putting off their decision for fear of being pushed out of deals by first-time buyers and investors.
In contrast, the fastest-growing prices nationwide are now to be found in the cheaper counties like Cavan (20pc) and Leitrim (15pc), and also in the big regional population centres, where inflation is now hitting double percentages - the cities of Cork, Galway, Limerick and Waterford. The regional city surge is perhaps the most interesting departure nationally and is being caused by worsening shortages combined with stronger-than-expected growth in jobs and tourism.
Galway City prices are up 14pc, those in Cork City Centre are up 10pc and Limerick City Centre's hiked 12pc. Waterford City and county values are up 17pc. Further surges are expected this year in the regional cities, where almost no new schemes will be launched in 2017 and investors sweep in to compete with first-time buyers over smaller, centrally located homes such as apartments and terraces. Many regional cities have already experienced price increases of 10pc in the previous 12 months. It means that affordability issues are kicking in and causing a drift to new commuter centres in places like Mallow and Tuam, as locals are increasingly priced out. The potential for further inflation in Cork, Galway and Limerick cities is also attracting outside investors, particularly from Dublin.
This will also be the year when shortage kicks in hard in regional towns where absolutely no new homes are available, nor are likely to be, given that second-hand properties are still typically selling at 30pc below construction cost.
Finally, markets in many counties are being Brexit-bashed and this is expected to worsen in 2017. Counties which had formerly seen many Irish emigrants returning from the UK on the back of stronger sterling saw this market cave in, as sterling plummeted and those with homes to sell in Britain decided to postpone.
Those holiday-home markets which have traditionally been popular with British and Northern Irish-based buyers (West Cork and Donegal) saw demand shrink, while other markets are simply being hit indirectly by the overall economic effect of lost shopping and services business over the border (Monaghan and Donegal).
Against all this uncertainty, how much is your house worth in 2017? We have measured the value movement of more than 37 different types of properties across 64 micro-markets.
So, whether you own a three-bedroom semi in Tallaght, a two-bedroom apartment in Cork City or a five-bedroom detached home in rural Sligo, we can tell you how much it's worth today, what it was worth a year ago, and how much our local experts believe it will be worth a year from now.
How much is your house worth? Only the Irish Independent has the answer.