WHICH DI­REC­TION ARE WE HEAD­ING?

Though a new report from Daft.ie claims that house prices in Wicklow fell by 6.7 per cent in a year, Es­ther Hay­den ex­plains why it’s not all bad news in the mar­ket

Bray People - - NEWS -

TALKS OF green shoots in the hous­ing mar­ket in Wicklow may be a tad pre­ma­ture with news that houses prices in the county have dropped 6.7 per cent in a year. How­ever, com­pared to the 18 per cent drop ex­pe­ri­enced the year be­fore there are signs that the mar­ket is some­what sta­bil­is­ing.

The lat­est Daft.ie report which de­tails the hous­ing mar­ket na­tion­ally for the fi­nal quar­ter of 2012 shows that houses prices in Wicklow are 6.7 per cent lower than a year pre­vi­ously.

How­ever, it’s not all bad news as there had been a drop of 18 per cent dur­ing the pre­vi­ous 12-month pe­riod.

The av­er­age house price in Wicklow now stands at €224.705 which is a whop­ping 54 per cent be­low peak lev­els.

How­ever, there is a lot of re­gional dif­fer­ences within the county with prices in North Wicklow gen­er­ally far in ex­cess of prices fur­ther south and in­deed West.

Econ­o­mist with Daft. ie Ro­nan Lyons said ‘ the con­trast be­tween ur­ban and ru­ral prop­erty mar­kets has grown sub­stan­tially over the last twelve months, led by a re­cov­er­ing Dublin mar­ket. In the cap­i­tal, al­most two thirds of prop­er­ties sell within four months cur­rently. In Mun­ster and Con­nacht-Ul­ster, the fig­ure is be­tween one in three and one in four, and there has been very lit­tle im­prove­ment in con­di­tions over the last year.

‘ Ul­ti­mately, the dif­fer­ences are due to cities hav­ing no sig­nif­i­cant over­sup­ply from the boom years and also en­joy­ing bet­ter em­ploy­ment prospects. None­the­less, the end of mort­gage in­ter­est re­lief may have led to a rush of de­mand in 2012, so it re­mains to be seen whether the sta­bil­i­sa­tion seen in the sec­ond half of 2012 con­tin­ues into the new year.’

With very lit­tle ghost es­tates Wicklow doesn’t suf­fer from a prob­lem of over­sup­ply which is help­ing to keep prices rel­a­tively high.

Mr. Lyons said ‘ the to­tal num­ber of prop­er­ties on the mar­ket na­tion­wide is at its low­est in five years.

‘ This is be­ing driven by Dublin, where there are fewer prop­er­ties for sale than at any point since Fe­bru­ary 2007. The num­ber of prop­er­ties sit­ting on the mar­ket has fallen by 50 per cent in the last cou­ple of years. There is now no back­log of Celtic Tiger hous­ing in the cap­i­tal. Even in Mun­ster and Con­nacht-Ul­ster, stock for sale is back at mid2008 lev­els, although this rep­re­sents a fall of 20 per cent, rather than 50 per cent, in the num­bers sit­ting on the mar­ket.

How­ever the end of mort­gage re­lief may have en­cour­aged some peo­ple to buy in 212 cre­at­ing some­what dis­torted fig­ures.

Mr. Lyons said ‘ look­ing ahead to 2013, it is clear that the end of mort­gage in­ter­est re­lief may have an ad­verse im­pact on the mar­ket in the first half of the year.

‘Ef­fec­tively, some of the de­mand from 2013 was stolen and crammed into 2012 in­stead. None­the­less, lev­el­ling the play­ing field be­tween buy­ing and rent­ing long-term is an im­por­tant step in cre­at­ing a healthy prop­erty mar­ket.

‘As is an an­nual prop­erty tax, which is ef­fec­tively re­plac­ing Celtic Tiger-era stamp duty. None­the­less, all the indi­ca­tions are that a bal­ance has been reached in Dublin – and pos­si­bly in the other cities – be­tween sup­ply and de­mand.’

What does the fu­ture hold for house prices?

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