An increasing number of investors are buying properties in Belfast, where prices are more attractive than those in Dublin. Demand for apartments in the centre of Belfast and other convenient locations is high and investors are expected to show an interest in a number of schemes due to come on to the market in the new year.
Large terraced houses in Stranmillis and Malone and other sought-after areas of Belfast offer good capital appreciation and are also attracting interest from southern investors. However, investors encouraged by lower property prices will not find rental returns as strong as in Dublin, estate agents say.
"We feel that in the North, and Belfast in particular, there is room for good capital appreciation. As investment comes in from the US, the UK and the South of Ireland, it will have a knock-on effect for the whole economy in the North and property will be a very important part of that," says Thomas O'Doherty, of Hooke & MacDonald.
A glimpse at the price of properties in Stranmillis, a five-minute walk from Queens University, reveals a marked difference from the prices of similar houses in Dublin.
The BT9 postal area of Belfast, which includes Malone and Stranmillis, would equate with Ballsbridge in terms of its desirability for house buyers. As well as its proximity to the university, it is well served by a plentiful supply of shops and restaurants. Yet, a beautifully maintained three-bedroom terraced house recently sold for £94,000 and four-bedroom properties fetch up to £130,000. In February, more than 60 four-bedroom townhouses at Ardenlee Green, in Ravenhill Road, were sold within two weeks, priced at between £105,000 and £107,000. Such prices are but a distant memory in Dublin.
It is important to note that rental returns are not as strong. An investor buying a three-bedroom house in this district could expect to achieve around £450 per month, but such properties can expect to rise in value as the North's economy gets stronger.
"There have been a number of people buying who have kids in Queens or Jordanstown who think it is a good idea to have a property here. There are also people who have businesses in Dublin and Belfast who are buying a property which they can use, rather than staying in hotels," says Mr O'Doherty.
In contrast to Dublin, Belfast's apartment scene is on a modest scale, but a number of developments are being planned and demand for modern city living is high. Hooke & MacDonald, which has handled the majority of apartment schemes in Dublin, opened an office in Belfast in January.
A development of 74 apartments at Bradbury Court, off the Lisburn Road, was sold out in a matter of days. One-bedroom units were priced from £78,950 to £82,950, while two-bedroom units were priced from £86,950 to £105,950. Investors from the South were among those who purchased units in the scheme.
Richmond Green, a development of two-bedroom apartments, is being launched this week near Holywood, four miles from the city centre. Prices range from £56,950 to £62,950, a stark contrast to apartment prices in Dublin.
Two-bedroom apartments rent for between £4,000 and £5,000 per year, with three-bedroom units earning between £5,000 and £6,000 and four-bedroom units letting for up to £6,500.
Small houses in some areas of Belfast offer particularly good value, according to Desmond Turley of Ulster Property Sales. Three-bedroom semi-detached houses 10 minutes from the city centre can be bought for around £75,000 and in the Donegal Road area, houses can be bought for £25,000.
As well as the sought-after BT9 district, investors should investigate properties in south Belfast areas (BT 6,7 and 8). Cheaper houses for investment can be found in BT15 in north Belfast, where land prices are lower.
Apartment developments are planned for the inner city and the Laganside area, where demand for accommodation is set to rise with the arrival of a number of businesses. British Telecom, Abbey National and Prudential are all due to open offices in the area and a Hilton Hotel opened last month.
Rental returns are lower than those achieved in Dublin, but capital growth gives such properties investment potential. Belfast's rental market will grow, but this should be allowed to happen through natural growth, rather than through a hyping of the market, says Mr Turley.
"I am concerned that people will get greedy and there will be an oversupply of rented accommodation which will not be let," he says.
Prices have risen in Belfast in recent years, but not on the scale witnessed in Dublin. In 1987, a three-bedroom redbrick house off the Antrim Road would have cost around £28,000 and would now fetch around £85,000. A six-bedroom late Victorian house in the Malone area sold for £57,000 in 1985 would now achieve over £300,000.
In its bid to calm house prices in Dublin, the Bacon Report did no favours for investors and many have since deserted the residential market. Estate agents in Belfast are now busy sending out brochures to a range of investors in the South who are being attracted by the low prices, according to Jonathan Steen of Templeton Robinson estate agents.
"Mainly, it is people from Dublin with a couple of properties who are looking at the lower prices here. People are predicting that prices will keep going up here for the next five to 10 years and that some properties will be worth a lot of money by then," he says.
