Dublin house prices continue to rise in a market that is now seeing its seventh consecutive year of growth. Second-hand house prices rose by more than 25 per cent last year, according to Dublin's largest estate agency firm, Sherry FitzGerald and prices have taken a further leap in the first two months of this year, judging by recent auction and private treaty sale results. Record prices are being achieved both at auction and in private treaty sales for houses and apartments at every level of the market, from modest three-bedroom semis in the outer suburbs, to apartments and artisan cottages in the inner city to large family homes in the most desirable suburbs.
"Demand is exceptionally strong, particularly in the first-time buyers market," says Claire Cullinan, managing director of Sherry FitzGerald. "This is partly to do with the time of year. Traditionally, there is very little supply at the beginning of the year and we expect prices to stabilise after Easter when more properties come on the market."
The market is being fuelled by continuing low interest rates and overall confidence in the rapidly expanding economy and although there have been warnings from financial institutions that the housing market is overheating, these do not seem be affecting house prices yet.
House-hunters are facing stiff competition for properties in all price ranges, as the number of people at house-buying age in Dublin increases every year.
At the top end of the market, new millionaires in the IT and financial services sector have been behind many of the biggest purchases and this trend is likely to continue. The number of first-time buyers is also increasing, according to Claire Cullinan. "All our branches have seen a significant rise in first-time purchases, particularly throughout west Dublin where the escalating cost of new homes has created a strong market for second-hand homes which look to be good value by comparison. " Although interest rates are set to increase over the coming months, the indications are that prices are still rising. Leading estate agents are predicting price rises of between 10 and 15 per cent this year, while early in the year, Sherry FitzGerald predicted the increase would be more like 20 per cent.
One definite trend emerging is the rising cost of property located close to the city centre, as commuters become increasingly frustrated with traffic congestion. While many of the top-selling houses in recent years have had seaside addresses, this year will see wealthy buyers move towards the city centre, to homes in Ballsbridge and even closer to town in the Georgian squares and terraces of Dublin 2.
In Dublin 4, Lisney expects to fetch around £3 million at auction next month for a detached house on Herbert Park - twice what a similar property would have achieved three years ago. According to selling agent Tom Day, one of its strong selling points is its proximity to the city centre.
"Houses within a three-mile radius of the city centre have been doing particularly well and this trend is bound to continue," says Claire Cullinan. There has been a surge in prices in areas such as Ringsend/Irishtown, East Wall, Stoneybatter and the network of streets off the South Circular Road where tiny houses now change hands for big money. In recent sales, a one-bedroom house on Lombard Street, in Dublin 8, fetched £400,000 at auction while in Ringsend, a three-bedroom house on Strasburg Terrace sold for around £280,000.
With Edwardian and Victorian redbricks now outside the reach of all but the wealthiest buyers, the humble pre-War semi is acquiring all the cachet of a period home and prices for this type of property are set to rise even further in the coming year. The appeal of this type of property is obvious - typically these houses are found in quiet streets or cul-de-sacs in settled neighbourhoods while the houses themselves tend to have good reception rooms and room to extend over a garage or to the back.
Sherry FitzGerald fetched an exceptionally strong £710,000 at auction for just such a house at Gilford Park, in Sandymount. These properties are likely to gain in value and those that have been refurbished to a high standard will appreciate at a fast rate. In the first-time buyers market, house-hunters with not much more than £100,000 to spend and who want a new house are heading out of Dublin. Towns and villages in an arc from Drogheda over to Longford and down to Gorey are drawing couples willing to commute to a home they can afford.
With the average price of a new three-bed semi in Dublin climbing to £140,000-£150,000 even in once-affordable areas such as west Dublin, these buyers have little choice. They can still get a three-bed in Edenderry for around £100,000 to £110,000, and for around £90,000 in Longford town (where tax breaks are available under the Rural Renewal Scheme). In Mullingar and Gorey, which are that bit closer to Dublin, prices run to around £110,000-plus.
This trend may change in several years, if prices in and near Dublin calm down. The only thing that will affect this is increased supply, and Frank Doonan, of Gunne Residential, points to Fingal as the new growth area. The recent signing of a contract for a sewage pipeline for the Baldoyle racecourse is the key to freeing up residential land, he says. So buyers in a mood to bide their time should keep an eagle eye on the area, which is going to become the new west Dublin, says Mr Doonan.
Not all first-time buyers, of course, are the traditional couple wanting the three-bed semi; that mythical buyer has disappeared and been replaced by single people trying to buy a home of their own, either by themselves, with siblings, even with a group of friends. Many are not looking for a new home at all, and are perfectly happy to buy second-hand, if they can find one in the right location.
Many are interested in buying one-bed apartments, two-bed townhouses, and a sizeable number will not commute much more than three miles from the city centre. But as prices in popular parts of the redbrick inner city ring, such as Stoneybatter and Ringsend, have shot up to the £140,000/£150,000 mark, many are now hunting for the last affordable ex-local authority homes in places such as East Wall, Cabra, and Whitehall. They need to budget at least £120,000 to buy in these areas, and at that price, will need refurbishment.
Buyers willing to consider Dublin 15 - Huntstown, Hartstown, Clonsilla, Blanchardstown - will find three-bedroom houses from around £120,000. Finglas is also affordable. Houses in the increasingly popular Finglas East (the Glasnevin side) can be bought for around £125,000. In Finglas West, heading over to Ratoath Road, ex-local authority houses can still cost under £100,000.
Although new apartments are largely outside the reach of first-time buyers, you can get secondhand one-bed apartments in the city centre - along the quays, on Gardiner Street - from around £115,000. And Ken MacDonald of Hooke and MacDonald expects that some kind of tax reliefs may be introduced in parts of the Coombe and Cork Street, to encourage apartment developments there. Thousands of apartments are also likely to be built in docklands, although it remains to be seen how affordable these will be.
