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
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?