NewsHouse Price Surges Outside The Capital

April 7, 2015

Q1 2015: Focus on Carlow and Kilkenny

data  It’s official, I have made the transition from property commentator to property cynic seamlessly.

Speaking this morning with John Masterson on the Sue Nunn Show on KCLR 96fm (serving the Carlow/Kilkenny areas) I was asked about the Irish Independent headline ‘Asking price for homes up twice as fast outside the capital’. This headline was taken from the latest report (Q1 ). As any regular listeners or readers will know, I have little regard for quarterly marketing efforts of any property sales websites on the basis that their findings coming from asking price data rather than actual achieved price data. Certainly, these reports were useful prior to the introduction of the National Property Price Register but today they are unnecessary and entirely self-serving. Buyers today should be cognizant of the Central Statistics Office (CSO) reports for insights into mortgage lending (cash transactions are not included) and use the as their main market assessment tool.

Having said that, the report can be used as an overview of trends, for instance, it is true – and expected – that prices outside of Dublin are starting to recover with vigour. This happened in Dublin in 2012/2013, what we are seeing now is a game of catch-up by regional towns. Counties Clare and Waterford recorded some of the largest increases and it is no coincidence that these are two of the counties that were left behind when recover started to spread, over two years ago.

The simplest way to read the current market is to remember that Dublin is the buyers’ hub, both investors and homebuyers. Towards the end of last year, there was a last minute ‘property grab’ within the capital, with investors trying to close deals before the end of the year to avail of capital gains tax or CGT waivers, while home-buyers rushed to buy depleting stock before the Central Bank introduced changed to their mortgage deposit conditions. This resulted in a rush in Q2 and Q3 of 2014 but eased off towards the year end as conveyances took place. A slowdown in transactions for Q1 2015 was entirely expected. The CGT waivers and changes to Central Bank lending had less of an impact outside of Dublin.

While the headline might appear telling, looking at the figures is less sensational; Q1 increases in Dublin were 3.4% or €8,500 on the average €250,000 property whereas increases regionally on the average €110,000 were €6,600 or 6%. In essence, buyers in Dublin saw their desired property increase by almost €2,000 more than regional buyers over the same three month period.

One useful aspect of the reports is that it does compare the gap between asking prices and transaction prices which, in the recent past, has been extensive. In the midst of the crash, asking prices were well above actual transaction prices; however, during the recovery period, asking prices remained relatively static while transaction prices increased and this caused an opposing discrepancy between the two sets of figures. In this latest report on Q1 2015, the gap between asking and actual transaction prices is closing and this is a good thing for buyers. It facilitates more accurate valuations for the purpose of making offers and negotiating purchases.

So, the story is, there is no story. Recovery continues, and this recovery is more tentative in certain areas. If you are considering buying in 2015, look up the price register for an accurate picture of what is happening within your chosen area.

Access the report here:

Carol Tallon