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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
Average UK prices up 1.4% in May, latest data shows
Average UK house price increased 5.6% annually and 1.4% on a monthly basis in May, taking the average home price to £212,495, according to the latest data to be released. In London the market is seeing significant growth again following reservations around the general election with prices up 16.7% year on year and 3.4% month on month to an average of £536,286. Sales in London have recorded their biggest monthly uplift since August 2014 and the monthly data report from haart estate agents also shows that in May there were 11 buyers chasing each available property across the country but this rises to 20 in London. Overall data from the firm has now shown a steady upward trajectory for UK property prices since November 2014, which has been driven by high levels of demand in relation to supply. Average first time buyer property prices across the UK are also on the increase, up 4.3% annually and 1.7% on the month. The number of new buyers registering has increased marginally on the month in May, up by 0.3% since April. However, the number of new buyer registrations is down 12.7% annually. But the firm says that given the particularly high levels of buyer activity in 2014, a fall in the number of new buyers is to be expected. The volume of new property instructions coming to the market has increased 2.6% on the month and haart says that this emphasises that sellers are feeling confident when it comes to putting their home on the market. There are now 11 buyers chasing each property for sale across the UK, which is a slight fall in activity levels on an annual and monthly basis but still shows that the market is busy, with consumer confidence high. The average loan advanced to a first-time buyer has increased 4.2% annually to just shy of £130,000 which the report says reflects strong institutional confidence in lending. As with the number of new buyer registrations, first time buyer registrations have fallen annually, which is a reflection of the strength of last year’s market. The data also shows that the North of London is the most expensive postcode area in which to buy with prices up 36% annually to an average £667,944. The North West is the only postcode area where the average property price is still less than £400,000. Paul Smith, chief executive officer of haart pointed out that with all this positivity in the air and continued low mortgage rates more people will aspire to buy, and without accompanying fresh supply property will become more unaffordable. ‘First time buyer activity in London is down significantly with 30% fewer first time buyer registrations in May 2015 compared to May 2014. The result will be that young professionals are driven from key areas as they can’t afford to live there,’ he said. ‘This is bad news for local economies and the UK as a whole and we need at least… Continue reading
