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House prices growing twice as fast outside cities in Covid exodus

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Workers are still looking to move away from the cities despite the easing of Covid restrictions and the return of office life.

The trend of home buyers moving to rural locations, that began in lockdown, is now snowballing rather than slackening off.

The Irish Independent can today reveal new property data that shows a steep escalation in moves to the country over the past three months,

Regional and town property prices have been increasing twice as fast as those in cities.

At the same time, rural and town-based estate agents report that up to half of their buyers are now coming from a city.

The latest Irish Independent/ Real Estate Alliance (REA) Average House Price Index report shows that the price of an average three-bed semi-­detached home has risen a massive €3,500 a month since the end of June.

The biggest demand-driven prices rises came in commuter counties and bigger towns as buyers continued to move out from the capital in anticipation of remote working. At the same time, price increases in Dublin, Cork, Limerick and Galway cities ranged much lower as a result, from 1.5pc to 2.4pc.

“The rural flight, which began during lockdown, shows no signs of letting up, even in the face of a return to office working,” said REA spokesperson Barry McDonald.

“In my own area, which is Lucan, we are seeing a combination of people selling to move farther afield and buyers moving out from the city centre because they feel they don’t need to be in walking distance of the office any more.”

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In Stoneybatter, long a sought-after area for young professionals, REA Fitzgerald Chambers reports 100pc of its sales for the period were
conducted on behalf of vendors who are moving out of Dublin.

But the race for larger homes for less money in high-­amenity locations has intensified to hitherto unseen levels in towns like Nenagh, where more heated bidding wars meant that three-bed semis are now selling for almost one quarter more (23pc) than they were in June – an increase of €45,000.

Mr McDonald said: “In Nenagh, REA Eoin Dillon has reported that three-bed semis that previously fetched €190,000 have sold for €235,000, such is the scarcity of supply. The effect is being felt nationwide with counties such as Tipperary (9.2pc), Donegal (8.4pc) and Kilkenny (7.3pc) all experiencing sharp rises in Q3 as buyers seek value locations.”

In Roscommon 75pc of sales in the last three months were of family homes to people who are returning to the county from cities.

Agent Michael Boyd in Kilkenny says average prices have risen by €17,000 in Q3 to €275,000 and properties are now selling in a record two-week window.

Such is the supply shortage in many towns, at a time when mortgage availability has increased, that even a small number of extra buyers is enough to send local prices surging.

Agents say that the initial flow of early Covid-19 rent refugees from the cities is now also being joined by city-born buyers as well as a surge of interest from ex-pats, anxious to return to Ireland after the pandemic.

In Dublin city, house prices still rose substantially, by over €10,000 in Q3, increasing from €456,667 in June to a present rate of €467,000.

However, in Clontarf the average price of a semi- detached home rose by 6pc in the past three months to €715,000. This was a jump of 19pc annually according to agents REA Grimes, as interest rises in higher value properties in good locations.

And while the national average four-week time in which it now takes to sell a home is the lowest in decades, agents say the vendor’s market is massaging that picture. “The survey’s average of four weeks to sell should be even lower because, while bidding is fast and furious, vendors are not rushing to accept offers,” Mr McDonald said.

“Buyers are bidding to their maximum levels very quickly in the rush to secure a home – even on houses that may be in poor condition, despite increased construction and renovation costs. With an exceptional shortage of stock, demand is being fuelled by an increase in mortgage-­approved buyers on the market.”

The Irish Independent/REA Average House Price Index is based on actual and up-to- date sales of three-bed semi- detached homes, the country’s most typical type of home.


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