Two-speed price recovery evident in property market

A two-tier property market appears to be emerging in terms of price recovery with Dublin and high-population urban areas outperforming the rest of the country.

In a Daft.ie report economist Ronan Lyons said the latest figures show the gap between prices in Dublin and elsewhere is "growing quite rapidly".

The reports by property websites myhome.ie and daft.ie highlight increased activity in the Dublin market as a measure of recovery while urban areas may require the construction of more family homes.

Falling more sharply
Outside Dublin the market adjustment is far from complete, with prices falling more sharply and oversupply still a problem. "A year ago, a four-bedroom detached home in south county Dublin was 2.6 times the prices of the same property in Mayo but that ratio has since risen to 3.5, well above levels seen at the bubble," said Mr Lyons.

“The growing differential between Dublin and elsewhere signifies that first-time buyers are no longer prepared to sprawl and pay the costs of long commutes. But with prices actually rising again and only in certain parts of the country, this has even greater implications for the Government, as it suggests that there are not enough properties in areas close to jobs and other amenities that first-time buyers are looking for,” added Mr Lyons.

Daft.ie said the annual rate of fall countrywide in asking prices eased to 6.6 per cent, down from 15 per cent a year ago. According to Daft.ie, this means that prices are on average 54.7 per cent below their peak in 2007. Daft.ie found that trends in Dublin were not reflected in other cities. Asking prices are down by 9.8 per cent in Cork, 14.6 per cent in Waterford and 10.7 per cent in Galway.

Price stability
Outside the cities, prices were down by about 10 per cent on average, although the fall was greater in Connacht-Ulster (15 per cent) than in Leinster (8.5 per cent) or Munster (9.5 per cent). MyHome.ie found the median asking price in Cork and Cork City remained unchanged during the last quarter at €195,000 while it held in Waterford at € 179,000. In Co Galway prices fell by 1.3 per cent to €185,000.

In her report for myhome.ie, economist Annette Hughes found prices are stabilising in Dublin, with the annual rate of of 4.8 per cent decline in the city about half the national rate.