Rollercoaster year as prices go up and down
Values in some markets rose, fell and rose again — in the same twelve months — as ‘exceptions warp’, renovation prices, Brexit and landlord blues all impacted, writes Mark Keenan
MANY types of homes are seeing their values stall or even fall throughout Ireland for the first time since the property crash. Even so, in a market where the average price nationwide is today €340,000, most homes have added value, by an average of 5pc since this time last year. The data published here today
in How Much Is Your House
Worth? 2019 — the Irish Independent’s annual snapshot of property prices which values homes by type, neighbourhood and county — shows radical differences between price performance locally and even by property type in the very same neighbourhoods and streets.
While some local markets have been experiencing double-digit inflation at boom-era levels, others are seeing values fall, in what estate agents have described as a “very strange year”. Some postcodes have even seen prices rise, fall and then rise again in the same 12-month period thanks to chaos caused by the way in which loan exceptions to mortgage rules are being issued by lenders.
As a result, most of the prices printed here for Dublin markets were much higher in the summer of 2018 than they are now. Meantime an “exceptions bounce” is already lifting off this month and is expected to last until May.
In Dublin 22, prices rose 9pc from January to June and then fell back again by 4pc between June and Christmas, finally leaving values up overall by 5pc on this time last year.
Mortgaged buyers are now jumping to the rhythm of the banks’ drum — and in particular to the timing of how exceptions are issued from the start of the year until they run out. It causes a rush of purchasing — and an unnatural surge of prices at the front end of the year. But come summer when the exceptions run out, many markets fall into a coma with less sales than usual. During this period, prices stall and sometimes fall again. By November, bidding and prices pick up again as buyers aim for early new year exceptions.
Through the last 12 months, other cooling influences have included a big fall-off in purchases by investors and at the same time those already in the rental market are selling up in droves in what some agents are calling the ‘landlord exodus’. Agents say that despite the highest rents in memory, landlords are leaving in reaction to higher taxes, costs and rent caps.
At the same time, a big surge in building costs and a fall in availability has made older properties less attractive. Agents report builders widely reneging on prices agreed with bidders before purchases. Increases of up to 50pc in estimates post-purchase meant many simply put the house right back on the market.
Brexit worries have impacted values in some locations while in others prices have run up against affordability thresholds under the Central Bank’s lending regime.
In some places the arrival of new homes in numbers is cooling the prices of their second-hand equivalents at a rate which is beyond past precedent. Buyers of new versions not only get brand new A-rated homes, which can be cheaply run, but first timers also get the benefit of Help to Buy, generally worth €20,000.
Localised effects, captured here in grassroots detail, were many and varied and sometimes made for more of an impact than national trends. For example, a shortage of homes in Kilkenny caused values to surge by 22pc in the last 12 months while in Dublin 12, all homes shed value by around 5pc. The latter occurred after a similar shortage which had occurred in 2017. When supply rectified in the last 12 months, the price levels reached previously became unsustainable and had to come down.
For these reasons, some counties which have turned in very high rates of inflation for the past year are predicting very little if any growth in 2019.
So whether you own a three-bedroom semi-detached in Tallaght, a two-bedroom apartment in Cork City, a five-bed detached in rural Sligo or a penthouse in Dalkey; we can tell you how much your home is worth today, how much it was worth a year ago and how much your local estate agents believe it is likely to fetch a year from now, based on current local and national market conditions.
So How Much Is Your House Worth? How much is theirs worth? Only the Irish Independent has the answers.