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Property prices in Dublin fall slightly month on month, but nationwide values are up
Residential property prices in Ireland increased nationwide by 0.5% in May and are 13.8% higher than they were a year ago, but fall slightly in Dublin. The latest data from the Central Statistics Office also show that prices are still some 37.5% lower than at the peak of the market in 2007. A breakdown of the figures show that in Dublin, which has been leading the real estate recovery prices actually fell by 0.1% in May but Dublin residential property prices are 15.2% higher than in May 2014. Dublin house prices fell by 0.2% in May whilst Dublin apartment prices rose by 0.4%. However, a CSO spokesman said that it should be noted that the sub-indices for apartments are based on low volumes of observed transactions and consequently suffer from greater volatility than other series. Outside of Dublin residential property prices rose by 1.1% in May and prices were up 11.9% compared with May 2014. Dublin property prices are now 38.1% lower than their 2007 peak with house prices 36.4% lower and apartment prices 41.9% lower. Outside of Dublin residential property prices were 40.8% lower than their highest level in 2007. But prices are expected to continue rising. According to Savills Ireland a 9.6% increase in Dublin rents over the last year, make further house price increases inevitable. Savills director of research, John McCartney, believes that a simultaneous increase in rents has limited any decline in residential yields. ‘While deposit rates have fallen by 28% since the end of 2012, property yields have held up better due to rental growth. This relative swing has diverted money into bricks and mortar, and this will continue,’ he said. According to Savills, investment activity will remain focused on Dublin where yields are particularly attractive. ‘Normally you expect riskier, less prime assets to deliver a higher income return. However a quirk of the current market is that average yields are higher in Dublin than elsewhere in the country. In part this reflects the fact that Dublin rents are rising so strongly,’ explained McCartney. ‘But it also reflects the fact that prices fell more steeply in Dublin during the crash, and they still haven’t fully bounced back,’ he added. McCartney pointed out that Dublin house prices would need to rise by a minimum of 12% to restore the natural pecking order in residential yields. And, with attractive rental returns, investor demand will be a key driver of this price growth. Continue reading
Prime property sales in Edinburgh hit by new land and buildings tax in Scotland
Prime property prices in Edinburgh rose by just 0.4% between April and June, the lowest quarterly price growth in two years, according to the latest market report. Prices are up by 3.4% on an annual basis which is down from the recent 5.7% high in June last year, the data from real estate firm Knight Frank shows. The firm pointed out that this slowdown in price growth can be attributed to the introduction of the new Land and Building Transaction Tax (LBTT) in April. The levy, which replaced stamp duty on all residential property transactions, means that those purchasing property with a value above £333,000 now pay more in purchase taxes. As a result, there was a spike in prime transactions in Edinburgh ahead of the introduction of LBTT. Since then however, there has been a fall in prime transaction levels in the city, with Knight Frank figures showing a drop in sales in the second quarter compared to the same period of 2014. The Scottish government originally forecast the tax would raise £235 million in 2015/2016. However, figures released by Revenue Scotland, the government body which administers and collects LBTT, showed that receipts from the new levy between April and June have so far totalled just £18.4 million. The Knight Frank report says it will be telling to see what impact the introduction of LBTT has on overall revenues at the end of this tax year but for now, the prime market in Edinburgh is still absorbing the change. Indeed, anecdotal evidence suggests that home buyers facing more tax under the new LBTT regime are negotiating with vendors over the additional burden, with the two parties often splitting the price difference between them. The market is expected to return to more normal trading conditions by the end of the summer however, and prices in Edinburgh are still being underpinned by low interest rates and continued economic growth. ‘We saw an enormous push pre-LBTT, with remarkably high sales in March followed by a very subdued April and May,’ said Edward Douglas-Home, head of Edinburgh City sales at Knight Frank. ‘Our experience is that buyers, particularly those looking for family homes valued at between £500,000 and £1 million, are having to eat further into their deposits when purchasing a property,’ he added. Continue reading
Demand for UK property at its highest for almost a year
Demand for property in May in the UK was at its highest level since September 2014 at a time when supply has seen a large fall year on year, according to estate agents. There were 383 house hunters registered on average per branch compared to 344 the previous month, according to the latest monthly report from the National Association of Estate Agents (NAEA). The report also records the highest year on year level of house buyers since May 2005 when 386 house hunters were recorded per branch. The data shows that the supply of housing has increased marginally from last month, with 46 houses up for sale per NAEA member branch in May, compared to 43 last month. And whilst demand for property is at similarly high levels to May 2005, supply has almost halved year on year over the 10 years, when 81 properties were available to buy. As supply and demand levels have risen, the number of sales per member branch has also risen slightly from last month. Some nine sales were agreed in May, compared to eight in April. Sales to first time buyers increased in May, jumping from 26% in April to 29% of sales in May. ‘There’s been a significant jump in the number of house hunters searching for properties this month, no doubt because the uncertainty of the market following the election has worn off and confidence has returned,’ said Mark Hayward, NAEA managing director. ‘However, supply does not meet the rise in demand, and as consumer confidence grows we will continue to see a widening of the property gap. The housing shortage will not be solved any time soon, so as pressure mounts we will no doubt see increases in house prices, making it harder for those stepping on or up the ladder,’ he added. Continue reading
