D7 one of the few locations attracting big investor interest
FOREIGN investors are a big feature of the market in Dublin 7 and play a part in increasing the value of larger investment properties in the postcode by a significant factor.
Only 5/10pc of the larger period properties sold during the last year have been bought with a view to returning them to single-family occupancy, as yields remain too attractive to investors.
“Whereas in previous years the market in Dublin 7 was dominated by Irish investors,” says local agent Vinny Mullen, “this year at least 50pc of investors are foreign based.”
According to Mullen, many of these were based in the UK, and would have previously bought properties in London where average yields now stand at between 3 and 5pc.
With property yields in the capital now standing at between 9 and 11pc, Dublin has become more attractive proposition.
Mullen cites the example of 33 Nelson Street in Phibsborough, a property in very good condition, having been refurbished in 2014 and divided into eight residential units, that is producing a rental income of €91,000 per annum. This was on the market at the end of the year quoting €1,050,000 and attracting significant interest from investors, 90pc of whom would be cash buyers based in the UK.
“In advance of Brexit, and with the pound weak, these investors are looking for an income in euros,” says Mullen.
Prices for other property types have also been strong in Phibsborough, which was named 27th coolest neighbourhood in the world by Time Out magazine last September. The publication mentioned the revival of Phibsborough’s dilapidated Victorian buildings as one of the reasons underpinning its citation, alongside the convenience of the LUAS and the proliferation of trendy cafés and restaurants. The newest of these is Loretta’s, located in a former bank on the corner of the North Circular Road. At 25 Shandon Drive, a three-bedroom terraced house, went on the market earlier in the year asking €450,000 but closed in September at €600,000 - a serious jump.
“We reviewed asking prices in Phibsborough after that,” says Mullen, noting that the price might not have had the same level of traction later in the year.
The Navan Road area remains popular with families, and demand continues to outstrip supply there, keeping prices strong.
In terms of the year ahead, Mullen predicts that the market will perform in a similar fashion during 2019. “One- and two-bedroom apartments will be particularly strong,” he says, “as the yields are strong and in terms of affordability they are not as affected by the Central Bank rules.”