Development sites were the biggest beneficiaries of recent property price and population increases across Ireland, as a shortage of supply, particularly in residential areas, bumped up prices, new figures show.
According to a survey from the Irish Auctioneers & Valuers Institute (IAVI), potential residential and retail sites remain the most sought after, although office and industrial land also gained in value last year.
"Developers continue to defy the harbingers of doom, snapping up land at high costs," Alan Cooke, chief executive of the IAVI said. He said a number of record deals struck during the year highlighted developers' belief in the Irish property market.
Property entrepreneur Sean Dunne recently paid about €58 per acre for the site of the Berkeley Court hotel in Ballsbridge, Dublin.
Dublin saw the strongest price growth for potential residential sites, but prices across Leinster and Munster were also up by more than 15 per cent.
Infill sites in Dublin are particularly sought after because they offer a builder the chance to develop property in already established areas.
Demand for potential retail sites was also strong last year, pushing prices up by double digits, with Munster experiencing most of the acceleration. Industrial and office developments performed less well, although better than in 2004.
In residential property, demand for housing continues to outstrip supply, with double digit growth across all sectors.
A particular shortage in supply of large Dublin second-hand family homes pushed up the price of three and four-bedroom houses in Dublin by more than 13 per cent.
In Dublin 6, one IAVI member reported median house price increases of 23.5 per cent. Connaught was the only region to experience a slackening of price growth.
The retail and office sectors also continued to show growth in 2005, with more gains expected in both capital values and rents this year. Still, Dublin retail warehouses saw their rents fall as supply has outgrown demand.
High street rents remain strong, with Dublin's Grafton Street commanding almost double that charged by the city's Dundrum town centre.
The licensed sector fared better in 2005 than in recent years, with prime Dublin pubs rising in value by 2 per cent, compared with a fall of 4.2 per cent in 2004. Meanwhile, the prices achieved for agricultural land bucked the general negative trend surrounding the industry, with farm prices remaining reasonably strong.
In Northern Ireland, the property market was mixed, with retail and industrial sectors experiencing a downturn in their letting activity, while the residential property market recorded a record year, with average house price growth of 15 per cent.
In some areas, first-time buyers are being priced out of the market by investors, who in areas such as Newry have caused the price of land to double.
