Dublin apartment market sees uneven recovery

DUBLIN apartment prices have risen by 5.3pc in the last 12 months, with entry level onebed apartments; and apartments, priced under €220,000, experiencing the biggest rises at 6pc, according to results from the DNG Apartment Price Gauge. In monetary terms, an average Dublin apartment has risen in value by €13,500 over the last 12 months.

Apartment prices are rising strongly as first-time buyers compete to purchase one- and two-bed apartments at under €220,000 so that they can circumvent the new Central Bank regulations and can take up 90pc mortgages.

Investors are attracted by solid yields in the city centre, which, whilst not as appealing as they were a few years ago, are easily exceeding the near 0pc rates of interest that they are being offered for their deposits by financial institutions.

Apartments in the city are highly sought after and an increasing number of buyers are purchasing apartments to rent out under short-term rental agreements such as Airbnb where they are receiving premium returns.

However, apartments in some areas of Dublin have been very slow to recover in value. Examples of this are quality apartments in blocks located in west Dublin which were selling for over €300,000 at the market high point in 2006 but are now transacting for either side of €150,000.

Apartments such as this offer gross yields of around 10pc which is very attractive bearing in mind that void periods are now a rarity.

These properties and apartments located on the northside of the city near any of the new Luas stations, currently being constructed as part of the new Luas Cross City line, are my top buys for the year ahead where I anticipate strong capital growth.

Top end apartments are also selling well with many being purchased by downsizers who are moving from bigger properties to more manageable, secure and easier to maintain homes.

On the basis of the current trend continuing, Dublin apartment prices are likely to finish up 7pc-8pc higher than they were last year with further price growth anticipated for 2017.