Saturday 21 April 2018

Limerick City Centre: Booming city offers big value

'Soleil', O'Connell Avenue, was sold for €285,000
'Soleil', O'Connell Avenue, was sold for €285,000

Limerick City has had its strongest year economically since the crash and this is reflected in the city centre's districts, where the overall aesthetic has been steadily improving - almost no shop vacancies are left in key streets.

Big employers near the city centre, such as Regeneron and Uber, have continued to staff up and, like many international firms, hired staff from Limerick and elsewhere in Ireland, as well as bringing in personnel from abroad. All will require accommodation in a market where supply remains tight and there is no sign of development on the way.

Generally speaking, property values are up by 10pc through 12 months, according to local estate agent Geoff de Courcy of Property Partners de Courcy O'Dwyer. This includes three- and four-bed semis, which would not be so numerous in the city-centre area. Smaller city-centre homes such as apartments, terraces and cottages saw their values shoot up by 15pc amidst an intense interest from investors during a period when stock for sale has been running low. Overall, it meant the average price was up around 12pc.

Investors are accounting for around two thirds of sales in the city centre at the moment. Of the investors purchasing, two thirds are from Limerick City, while the rest come from Dublin, Cork and elsewhere, including the regional towns around the city.

When it comes to apartment sales, investor penetration is 80pc, while the 20pc of owner-occupiers purchasing are split between those trading down and first-time buyers.

Having been hit especially hard by the crash, Limerick city centre still presents considerable value, with a one-bedroom apartment averaging €52,000, and that's after inflating 15pc in the last 12 months and by 9pc in the previous year. Outsiders from Dublin and Cork have taken note.

There is more equal competition for the city centre's smaller houses, with two-bed cottages up €10,000 to €80,000 and expected to go up to €87,000 this year. Two-bed terraces are up in value by €16,000 to €121,000 and are heading for €132,000 this year. The three-bed version is already at €167,000 and likely to go to go over €180,000 in 2017.

Meantime, despite rising by almost 15pc through the last 12 months, an entry-level house can still be had in Limerick City for under €80,000.

The only new-homes scheme to provide new units in the city centre was an upper-end scheme located beside the Strand Hotel. The Strand complex, on the banks of the Shannon, has been taken over by a fund, and the apartments are being fed to the market for sale in tranches.

As these are larger apartments with a river view, they have proven the exception to the apartment rule and are being bought largely by owner-occupiers, including those trading down from more exclusive residential locations. There are no new schemes in the pipeline for Limerick city centre, which means price increases are likely to continue - our projection is by 9pc for the next 12 months.

Overall cash sales are still down at 20pc, the same level as last year, and reflective of the fact that vulture funds and banks are still offloading stressed property in steady tranches at strategic intervals. When it came to apartments, investors bought 80pc of what came up for sale.

The 'hotspot' most likely to add capital value in the year ahead is the Ennis Road, although de Courcy says this is very closely followed by the North Circular Road. Both enclaves at the top end of the city market are competed for by executives and wealthier professionals. "There's a mix of homes dating from turn-of-the-century to the 1950s, and a four-bed detached requiring modernisation here will cost you around €350,000.

At the top end, ex-pats are coming home from abroad having made a few quid and are targeting homes in these areas. Unlike many other population centres, Brexit doesn't seem to have had any major impact on the Limerick City market, even though many will be returning here from Britain with property to sell. It's also possible that the overall lift in prosperity generally has clouded its impact.

Irish Independent

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