This blog reviews the recent Geoview Residential Buildings Report which brings together both new and some of the existing information and looks at the trends over the last year in the residential property market. The key points are:
• Property prices nationally continue to rise at a slower pace of 5.8%
• Property prices outside Dublin rise at a faster rate – 7.9%
• Highest average property prices are in Dublin 4 €760,922
• Build output grows by 25% on 2018 with over 24,000 new dwellings
• Pipeline of construction strong with buildings under construction up 52.5% on 2018
• Eastern Counties and urban environments dominate growth
• National average price excluding Dublin breaks though €200k
While property price continue to rise, there has been a slow-down in the level of price increase in Dublin (4.4%) to €432,327. However, the average house price across the Dublin postal districts is wide ranging: from €233,663 in Dublin 10 to €760,922 in Dublin 4. That’s a range of a whopping €527,259 .You could buy just over three houses in Dublin 10 for one in Dublin 4. However, the gap has slightly narrowed from 2018 with Dublin 10 prices rising by 9% and Dublin 4’s actual dropping by 2% or just over €15k.
Outside of Dublin we see a slightly different picture with the prices rising by 7.9% on average and for the first time the national average prices of properties excluding Dublin has broken through €200k and is now at €214,679.
The national average hides some variants through the country with Wicklow showing the highest average price of €341,127 and Longford the lowest €115,330. However, one point of note about this that while Longford average price has risen by 13.6% Wicklow’s average price has actual dropped by nearly 4%.
These average price variations, and particularly what looks at a cap on the higher prices, is in at least part in part to the Central Bank rules in relation to mortgage lending. It may also explain growing demand and increasing prices outside of Dublin as people move to where they can afford.
What is also very noticeable is that counties with the smallest increase in average price (less than €5k) are all either in the West or North West namely Clare, Donegal, Leitrim, Mayo and Sligo.
The construction industry continues to react robustly to the user demands with building output up by 25% with over 24,000 new dwellings added in the last 12 months. While this is still short of the 30-35k that is seen as the long term average requirement it is a great step in the right direction.
What is even more impressive is that there has been a 52% jump in the number of buildings under construction up to 14,107 compared to 9,251 in 2018. As table 1 below shows, and as would be expected, Dublin has the biggest jump by number new to 4,250 while Kildare has the biggest percentage change jumping by 153% to 1,327 units under construction. (please note units under construction may have multiple dwellings – apartment blocks etc) .
Table 1 - Under Construction by key Counties
What is quiet noticeable is the continued urbanisation of Ireland with 67.5% of buildings under construction in five counties and the development concentrated in urban areas. This is further evidenced through the fact that over 50% of the 24,773 new addresses added to the GeoDirectory in the last year were in just four counties – Dublin, Meath, Kildare and Wicklow. When urban areas of Galway and Cork are added, this figure rises to 66.5%.
Unfortunately the county with the fewest addition and fewest site under construction is Leitrim with only 93 addresses added and 24 buildings under construction.
The growing level of urbanisation and perhaps the entry of corporate investors and tax incentives to build to rent has seen a growth in Apartment Blocks (which we classify as buildings with 5 or more residential units) with an increase of 2,843 apartments over the last year.
Dublin dominates the apartment market with just under 22% of all residential dwellings in Dublin is now an apartment in an apartment block. When Dublin is excluded from the analysis the national number drops from 9.2% of the residential stock to 4.6%.
Derelicts and Vacancy
For the first time the GeoView report looks at the level derelict buildings as a measure of the response of the market to the increasing demands. Firstly however, the national vacancy rate has remained constant at 4.8%. This may indicate that a vacancy rate of 4-5% may be the market operating at its most efficient level.
There are several counties that have very low vacancy rates with Dublin being the tightest market in the country, with a vacancy rate of 1.2% (albeit up by 0.3%). Kildare and Wicklow also have very low vacancy rates at 2.1% and 3.1%. These are also the counties with price pressure and increasing outputs by the construction sector.
The five counties with the highest level of vacancy are located in the North and North West Leitrim at the highest 15.2% and Roscommon 13.3%, Mayo 12.9%, Sligo 10.4% and Donegal 10.2%. Although there has been some very minor improvements with for example Leitrim vacancy rate dropping by 0.7% and Roscommon’s by 0.2%.
Table 2 below shows the level of derelicts has remained fairly constant over the last four years decreasing by 604 to 28,539. The vast majority 92.6% are located in rural areas and most likely one-off housing and unsurprisingly the biggest the decrease is in urban locality 501 and villages 47.
Table 2 - Derelicts
|Total Derelict Address Points
In summary while the residential property market is showing growth both in terms of current and future outputs there are still pinch points in the key markets in and around Dublin. The market is generally operating very efficiently with a low vacancy rate and greater utilisation of derelict sites. The good news for buyers is that prices rises have begun to moderate with markets at the upper end seeing some decrease and markets in low great areas showing very moderate increases.