Sale of houses over €1m slows down in 2015
Dublin's property market cooling
The sale of houses worth over €1m has dropped in the capital since the start of the year despite the pick up in the economy, according to residential sales figures.
In a sign that the overheated Dublin market may be starting to return to normal, only 24 houses costing €1m or more have been added to the the Residential Property Price Register since the start of January compared to 31 for the corresponding period last year. Although one or two houses may still be added to the register for 2015, the slowdown is indicative that the sharp rise in sales of houses selling for over €1m seen in 2014 is likely to be over.
Just 169 houses worth €1m or more were sold in Dublin over the course of 2012, while 213 were sold the next year. This figure spiked sharply in 2014, which saw 397 properties over €1m trade hands.
Sales rose sharply in 2014 compared to 2013 for the most part, particularly in the first six months of the year which saw almost double the number of sales compared to 2013.
However, this began to taper off in the latter half of the year and the slowdown was particularly evident after the end October. The sales increase in 2014 has even started to reverse since the beginning of the New Year, with just 24 houses sold to date compared to 31 for the same period in 2014,.
John McCartney, Director of Research with Savills estate agents, says that sales of more valuable properties may be in decline due to a decrease in "mattress buyers".
"People who sold properties a few years ago, in 2008, 2009 and 2010, took the view that there was no point rushing back into the housing market" he said. "Then when things started picking up in Dublin, around Q1 in 2013, that was when those people with mattress money started to mobilise fast throughout the second half of 2013 and the first half of 2014."
He added: "That may have been a once-off phenomenon and now that it has washed through the system we are now left with more price sensitive buyers who can't raise the money from the banks to buy expensive properties."
Mr McCartney added that it is possible that the Central Bank's new mortgage rules have led to a short-term reduction in the number of properties being sold.
"I wouldn't think that the rules would directly impact on people in the one million plus category as they weren't going to get a loan anyway, but they could have had an indirect effect in that people in the €400,000-€800,000 category are probably affected by the uncertainty and they are the people who some of those potentially in the million plus category would look to sell their properties to," he said.
Marian Finnegan, the chief economist and director of research at Sherry FitzGerald, said it was possible that "confidence was hit" with the announcement of new Central Bank rules, leading to more cautious buyers. She added that she expects the property market to cool both in Dublin and nationwide in 2015. "If you look at last year most of the inflation occurred in the first six months and slowed down as the year went on, and I think this trend won't be reversed, I don't see 2015 being as strong as 2014 at all," she said.
Sunday Indo Business