Regional buyers set buying pace
Some people living outside Dublin have much more confidence in the Irish property market than Dubliners and are showing increased interest in buying Dublin property. Nevertheless Dubliners are outbidding overseas buyers for properties in their native city and county.
These are some of the conclusions that can be reached following the latest analysis of the Allsopspace auction results in the six auctions that have taken place over the last 13 months.
In the latest auction at the beginning of this month as many as 60pc of all properties were bought by buyers from parts of Ireland outside Dublin. This is an increase on the average 58pc level shown over all six auctions.
Numbers of Dubliners buying in the May auction also increased but it is still a relatively low 30pc average for all six auctions. The increased Dubliner trend may have been influenced by the increased number of south Dublin houses on sale in May's auction. Both Dubliner and regional buyers may also be outbidding overseas buyers whose share of the purchases fell from an average of 14pc over all six of the auctions to 10pc in the May auction. It will be interesting to see if this trend is sustained as the banks lend more money or whether the May buyer profile simply reflected the mix of properties available in that catalogue.
Interestingly regional buyer interest is not confined to regional properties. They are also buying in Dublin. As many as 180 Dublin residential properties were sold for a total of €35.5m at the six auctions and Dubliners bought 47pc or less than half of them. Regional buyers snapped up 36pc of them and overseas buyers 17pc.
In contrast with buyer profiles for Dublin properties, Dublin buyers accounted for a much smaller share of the 46 Galway properties sold -- only 7pc. As might be expected Galway buyers accounted for 52pc and buyers from other counties bought 26pc with the remaining 15pc bought by overseas buyers.
A slight variation of the Dublin market pattern was seen at the Castleforbes Square apartment development in Dublin's North Docklands where overseas buyers accounted for an even stronger 21pc share of the 48 bought. A still substantial 33pc of them were bought by buyers from the regions.
Not only do the 48 sales in the one Castleforbes development suggest that demand is holding up well for well fitted north docklands apartments, but it also shows that prices there increased over the 13 months. According to Robert Hoban, director of auctions at Allsop Space, Castleforbes prices "rose by about 6pc across the board. This is quite remarkable given the backdrop, whereby the market was widely reported to have fallen by over 10pc over the same 12 month period."
Equally interesting was how the March 2012 auction saw the Castleforbes sales nail the myth that any Irish house would get a better price than an apartment. In the March auction all the north docklands flats sold for well above the prices achieved by the Dublin houses in the same auction which, admittedly, were not in the most sought after areas.
Mr Hoban says UK buyers accounted for most of these overseas buyers at Castleforebes while "we also had buyers registered in France and Monaco. As many as 85pc of the Castleforbes lots were sold with tenants in place and these prices indicated average rental yields of 8.2pc gross across the board."
All but one of the 48 sold above the reserve price and the exception sold for the reserve making for an average price at 22pc above the reserve price.
The highest price paid was €227,000 for 440 Castleforbes Square, a tenanted three bedroom apartment producing €17,400 per annum.
Interestingly investors appear to be willing to accept lower yields for Dublin apartments compared to Dublin houses. Davy Stockbrokers says that the 15 Dublin houses sold at the two Allsop Space 2012 auctions achieved an average price of €230,467, and reflected average yields of 9.1pc. In contrast the average price paid for Dublin flats, while lower at €156,511, suggested a much stronger average yield of 8.5pc.
This may be partly due to the condition of some of the houses which may require refurbishment while the flats may have been in better condition.
A completely different trend was the case with regional properties as 52 regional houses sold for an average of €89,442 and indicated yields averaging only 7.4pc.
Regional apartments are generating more generous yields of 11.2pc as 20 flats sold this year for an average of €59,650. This contrast may be due to owner occupiers preferring to buy houses rather than regional flats.