Property prices rising again ... but it depends on where you're selling
WITH house prices showing their first annual rise since 2008, has our love affair with property really been reignited?
Experts told the Herald today that prices could rise by as much as 12pc in Dublin this year.
However, it is a story that is divided by location and demographic. Family homes are back with something of a bang, whereas country mansions are a fraction of their boomtime value.
The green shoots of recovery in the capital are being matched by the "mixed bag" in the rest of the country.
Economist Jim Power told the Herald that in the Dublin area he is pretty optimistic that the corner has been turned. "I think prices will rise further in Dublin," he said.
Mr Power pointed out that there are a variety of issues which affect the property market in different areas.
These include a lack of economic activity, unemployment, and an excess supply of housing – they all have a factor on how the market will evolve over the next three to four years.
"The greater Dublin area is where the bulk of the economic activity is happening," he pointed out.
In addition, there is a scarcity of property coming on the market in certain areas, he said.
Mr Power said that houses have gone sale-agreed in two weeks.
Outside of Dublin, Mr Power expects areas such as Cork and Galway to do well. However, he can see the property market situation in other parts of the country remaining "in the doldrums" with high unemployment levels and a massive over-supply of property.
Taking a three-year view, there will be "very divergent performances", he said.
"On the plus side, mortgage availability is definitely improving, albeit from disastrously low levels," he said.
Mr Power added: "Given that prices have fallen by 50 to 60pc in Dublin from their peak in 2007, many buyers are perceiving that there is value in the market."
Meanwhile, he said that it is estimated this year that in excess of 40pc of transactions are cash transactions, rather than a mortgage. "People who sold at the peak are now coming back into the market," he said.
Economist Ronan Lyons said that property website Daft.ie figures show that asking prices in Dublin are up more than 5pc year-on-year, but asking prices in the rest of the country are down almost 10pc.
It's the first time such rapid growth in asking prices has been recorded anywhere in the country for almost six years, he said.
"The number of transactions happening, particularly in Dublin, has increased. If you compare now to two years ago, there are significantly more," he said.
Mr Lyons pointed out: "When people are very fearful about the future, they put off decisions like buying a house. People have become less pessimistic about what they think will happen to house prices in the next three to five years.
"It's the end of people worrying so badly about the future that is driving up transactions, rather than people being very optimistic."
Meanwhile, he said the choice available to buyers has dwindled. Recent Daft research showed between 2008 to 2011 there was an average of 6,000 Dublin properties to choose from at any one time. "The figure for 2013 so far is barely half this at 3,170," he said.
The same trend is happening nationally, total stock on the market is down from an average of 60,000 in 2008 to 2011, to 41,000 now.
fdillon@herald.ie