Friday 22 June 2018

The year of the long distance commuter

Ireland's most comprehensive price survey shows rapid price inflation in outer commuter counties not seen since the boom, writes Mark Keenan

Expanding commuter belt: Tuam, Co Galway
Expanding commuter belt: Tuam, Co Galway
Castleconnell, Co Limerick
Portarlington, Co Laois
Mark Keenan

Mark Keenan

Is 2018 is set to be the year of the long distance commuter? The data published here today in How Much Is Your House Worth? 2018, the Irish Independent's snapshot of local property value movements, highlights extreme property price surges in former outer commuter belt areas which have not been targeted by city buyers since the Celtic Tiger years.

The tight lending restrictions levelled by the Central Bank for some years now are curtailing city dwellers from buying near home but now driving them much further afield in search of homes they can acquire with a mortgage - in most cases for significantly smaller repayments than the equivalent rental payments in the city locales they are fleeing.

City rent levels, which now well exceed those experienced during the boom, have played a big role in pushing city dwellers out with urgency as letting prices became simply unaffordable for many, even in counties adjoining Dublin.

Values in Co Laois have jumped by a quarter and Wexford prices by a fifth in 12 months. Double digit percentage increases in Westmeath (10pc), Longford (17pc) and in Monaghan (11pc) are in part being attributed to a rise in Dublin based buyers in search of affordable (and loan qualifying) homes. Even agents in Roscommon, almost two hours from the capital, are claiming sales made to Dubliners.

It's not just Dublin's problem. Price refugees from Galway City and Limerick City have ratcheted prices up in their surrounding hinterlands by 38pc and 20pc respectively as they compete for homes.

The findings are published today in How Much Is Your House Worth? 2018, your annual survey of local property values by the Irish Independent in conjunction with more than 70 locally based estate agencies.

Our data looks at current price performances in 64 local micro markets throughout Ireland and has tracked the value movements of more than 37 different types of properties nationwide.

Our survey shows that while Central Bank lending criteria, along with rent controls, have helped to put the brakes on supply led property inflation in our cities; it remains far hotter than 'normal' market standards. Dublin City and county inflation is now averaging 10pc, slightly ahead of the 9pc national rate; despite the fact that so many buyers are being pushed out by loan criteria and high rents. Some Dublin agents are reporting that sales prices are now running at just 20pc below those they experienced in the 2007 peak, with one agent reporting a difference of just 10pc.

Galway City, also tightly restricted for new homes by geography, has had price rises of 10pc while Limerick and Cork City markets are exhibiting inflation levels ranging from 6pc to 8pc. All are well above a 3pc level considered 'normal.' The good news is that most of our experts across the board are expecting much smaller levels of inflation this coming year.

Lending criteria appears to be exerting control of the very timing of value surges. In numerous markets it was reported that almost all of the inflation happened in the early part of the year - coinciding with the period in which lenders tend to frontload their limited quota of lending rule exemptions.

Meantime we are seeing how immigrants, who came here in the boom years, are putting down permanent roots. Agents in outer commuter belt counties report large numbers of sales to Eastern Europeans, in particular Polish born nationals, who have been saving hard for many years and have also opted to escape surging rents in Dublin.

Brexit is having varying impacts or none. In West Cork, which has always appealed to non Irish connected British buyers, prices are static. Parts of Donegal which have traditionally experienced strong sales to buyers based north of the border have also experienced stasis. UK buyers in Kerry are down 70pc and have vanished from Tipperary North where fox hunt tourists once tended to buy cheap cottages.

Our data also highlights how new rent controls are impacting, particularly on apartment values.

Agents report a splitting of prices in rent control zones whereby more generous landlords who failed to raise the rents to high market levels, are now stuck with reducing capital values. In this way two identical apartments in one block, can fetch different prices in accordance with the level of their controlled rents.

So, whether you own a three bed semi in Tallaght, a two bed apartment in Cork City or a five bed detached in rural Sligo, we can tell you how much it's worth today, how much it was worth a year ago and how much our local experts believe it will fetch a year from now.

How Much Is Your House Worth? How much is theirs worth? Only the Irish Independent has the answer.

Irish Independent


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