Two-tier market emerges in Ireland

The price of family homes has risen in some parts of Dublin but the housing market elsewhere remains depressed, according to the Society of Chartered Surveyors Ireland (SCSI).

There are tentative signs of recovery in the Dublin market. Three- and four-bedroom, second-hand, semi-detached family homes in Dublin rose in value by 2.7 per cent and 1.1 per cent respectively last year, compared to declines of 12.6 per cent and 13.6 per cent in 2011.

Although the prices of family homes seem to be bottoming out, the price of apartments and other family homes in Dublin continued to decline.

Elsewhere, there were further substantial falls in house prices albeit at a slower rate than in previous years.

The report, issued yearly following a survey of the SCSI's estate agent members, suggests that the disparity in how markets are performing across the country means the Irish property market can no longer be viewed as one entity.

In Leinster, the average price of a second-hand, three-bedroom, semi-detached house fell by 7.7 per cent. This compared with a 16.8 per cent decline in 2011.

In Munster, the average price of a second-hand, three-bedroom, semi-detached house fell by 7.6 per cent; compared with a 9.3 per cent fall in 2011.

In Connacht, the average price of a second-hand, three-bedroom, semi-detached house fell by 7.1 per cent. This compared with a 15.2 per cent fall in 2011.

SCSI president Roland O'Connell said the figures showed that Ireland in 2013 was no longer dealing with a property crisis, but the legacy of that crisis.

He identified the difficulties in getting mortgages as the biggest impediment to a full-scale recovery in the housing market with 45 per cent of sales being for cash last year.

"Mortgages are still very hard to get. There is a limited number of cash purchasers. Permanent TSB are coming back into the mortgage market this month, but mortgages are still extremely hard to get," he said.

He predicted that there would be a stabilisation in prices in other parts of Dublin this year spreading to commuter counties and other cities, but areas where there is a chronic over-supply will remain depressed this year.

MyHome.ie managing director Angela Keegan said the survey bears out what is happening on the ground with the establishment of "micromarkets" in certain areas.

She said that a rise in the volume of transactions from 18,130 in 2011 to 24,673 last year was a sign of confidence returning to the market especially in Dublin.

She added that such trends would suggest a two-tier market is emerging, with key urban areas likely to stabilise at a faster rate than more rural counties.