Three significant residential property reports were released this week. They came from MyHome.ie, Daft.ie, and the REA nationwide network of estate agents. There was a time, not that long ago, when the data for these reports might have been in conflict. But this is no longer the case, the discrepancies this quarter are slight, and easily adjusted for as one portal has taken a significant lead in the marketplace over recent years. MyHome.ie reported a 12.3 percent year-on-year increase, whereas the increase reported by Daft.ie over the same period is 8.4 percent. Critically, the property market in Ireland is up 2.4 percent since the start of the year and is subject to likely double-digit percentage price hikes for the rest of the year.
It is worth pointing out that properties right now are selling for an average of 3.5 percent above their asking prices, compared to this time last year, when asking prices were being exceeded by just 0.4 percent.
Continuing the trend that emerged in the early days of the pandemic, prices are rising significantly higher and faster in rural areas. County Clare saw increases of almost 18 percent. Low stock levels of second-hand homes remains a problem for local estate agents across the country, and of course for would-be buyers. Speaking on Newstalk earlier in the week, the REA spokesperson relayed some pretty stark figures, for instance, there are only 19 properties available to purchase in all of Killarney. Also, two-thirds of all new buyers in Leitrim are not from the area. The trends are clear. Flexible working options and a renewed focus on quality of life is dispersing people, reversing the trend of centuries, where people had no option but to head towards the city for employment. Leitrim has regularly topped the lists of Ireland’s most affordable (‘cheapest’) housing, clearly people not familiar with the area are checking it out and liking what’s on offer.
But what does that mean for our cities? Frankly, it probably doesn’t mean as much as commentators would like it to. It might give some relief on demand levels, which is welcome as it will give new supply levels an opportunity to catch up. It might also mean greater affordability for people who choose to live and work in urban areas. What it inevitably means is that cities will need to do better in order to appeal to prospective residents. Prior to the pandemic, society was already starting to question how we work and where we live; now the focus is on how we choose to live and where we choose to work and spend our time. These trends need to be reflected in our places, in our housing offering and in our workplace offering. This is a massive challenge for the industry, but it is also a massive opportunity.
Lotus Investment Group