Ireland’s most expensive streets are revealed, as property prices stabilise
Daily growth of €15m in value of housing stock fuelled by new supply rather than increasing prices, writes Wayne O’Connor
ALEAFY Dublin street sandwiched between Rathgar, Milltown and Rathmines, now holds the illustrious title of Ireland’s most expensive street for the first time.
Temple Road in Dartry has overtaken Ailesbury Road as the country’s priciest address, according to research published today by property website Daft.ie.
The Daft.ie Wealth Report shows that while year-on-year prices have stabilised at 1pc growth, 11 streets nationwide saw two or more property transactions of €2m or higher for individual homes in the past year.
Much of the country’s residential property wealth is concentrated in the capital, with Dublin 6 accounting for four of those 11 streets.
Three properties on Dublin 6’s Temple Road were sold for more than €2m each in 2019. Homes there have an average price tag of €5.5m, the research shows.
Ailesbury Road and Clyde Road in Ballsbridge are the next most expensive addresses, followed by Temple Gardens and Orwell Road in Dublin 6.
All of the country’s most expensive markets are in Dublin.
The average asking price in Mount Merrion is now €777,000, followed by Dalkey, €743,000, and Sandycove, €740,000. The average asking price nationally is much lower at €257,000.
Outside of Dublin, Wicklow is the most expensive market with average asking prices of €333,000. Galway city is the most expensive market in Connacht/Ulster at €297,000. Meanwhile, Cork city is the most expensive market in Munster with average asking prices there currently €281,000. Most of these prices are similar to where they were a year ago.
Property prices across the country are stagnating and prices at the higher end of the market have “fallen back slightly”, Trinity College economist Ronan Lyons said.
The Daft.ie Wealth Report for 2019 also reveals that homeowners made marginal gains on the value of their homes in the past year — with construction growth accounting for most of the country’s increased housing wealth.
While the country’s housing stock grew in value by €15m every day this year, most of the growth was fuelled by new supply instead of rising property prices. Mr Lyons said that values at the higher end of the residential market dipped in recent months.
The report found values across the country increased by a combined €5.3bn last year. More than 96pc of this (or €5.1bn) consists of newly built homes coming into the market. It estimates the country’s housing stock is worth €519bn, a 60pc increase from when prices bottomed out late in 2013 after the financial crash. The Daft.ie report also highlights how house values have soared since then: it shows that 715 properties were ‘sale agreed’ for €1m or more in 2019.
Mr Lyons said the extra housing wealth shows the Government is foregoing billions in extra revenue every year by setting property tax rates (LPT) that are lower than in other high-income countries.
Writing in today’s Sunday Independent (below), the economist said 1pc of property wealth is taxed in countries similar to Ireland every year. In Ireland a fraction of 1pc is taxed. “If Ireland’s LPT were at 1pc of market value, as in many of its peers, and updated regularly, property tax would bring in €5.2bn rather than €500m. In other words, by choosing such a low rate of property tax, the Irish state — and more specifically its local authorities — are foregoing over 90pc of potential revenues.”
He said the higher rate is used in other countries to fund vital public infrastructure and services.
LPT rates are to be adjusted for the first time next year. They were originally set in 2013 on a self-assessment basis when property values were at their lowest point. While the market has cooled in the past 12 months, experts say it has stabilised and is healthy.
Financial adviser and mortgage broker Michael Dowling said construction growth, with more homes coming to the market, and Central Bank lending rules were beginning to affect pricing. Figures from the Central Statistics Office (CSO) show 14,764 new homes were brought to the market in the first three quarters of this year, an 18pc increase on the same period in 2018.
“There is evidence of stagnation in some areas, reduction at the top end of the market and an increase in the number of new homes,” Mr Dowling told the Sunday Independent.
“It is not a bad thing that we are at a level where prices are falling because it is reflective of people’s ability to borrow and people making a statement to say there is a price they are determined to pay and no more than that.
“Do we want to see property prices falling dramatically? No. But having a stable market is an awful lot better in terms of giving those who can afford an opportunity to buy.”
The current Central Bank rules — first introduced in 2015 — curtail the amount that can be borrowed for house purchase to 3.5 times a buyer’s salary, with a minimum deposit of 10pc for first time buyers and 20pc from other buyers also necessary.
They were brought in to reduce house price inflation from more than 21pc but have faced regular criticism.
The Central Bank decided earlier this month not to make any changes to the mortgage lending rules. Following a review, the regulator has concluded that the measures continue to meet their objectives of strengthening bank and borrower resilience.
The rules have been blamed for escalating demand for rental properties as buyers wait until later in life to purchase homes. Buyers complain the rules are restrictive but the Central Bank routinely defends them, saying they are designed to promote stability.
“It is a Catch-22 situation where the population demands we build more houses but the problem is people don’t have sufficient incomes to buy the houses that are required,” Mr Dowling said.
“That forces people in to the rental sector, which is the opposite of the property market because it keeps going up. It is a perfect storm in terms of what is happening at the moment.
“The Central Bank rules are working. It took a while for them to have an impact but they are having an impact now and the benefit is seeing stable house prices, no significant growth and that is not a bad thing because people will know property won’t be dearer now than it will be in 12 or 24 months’ time.”
The Daft.ie report shows the most expensive listing last year was the Abbey Leix Estate in Co Laois. The recently restored 18th Century estate comes with 1,000 acres of land including walled gardens, farmland and ancient woodlands. There are 10 houses and cottages on the grounds and the manor house is filled with classic furniture and art which, according to the report, “may be available to new owners should they acquire it”.
The asking price is €20m.
‘While the market has cooled, experts say it has stabilised’