HE price of an average three-bed semi in Irish towns andcities rose by 20.68% in 2014, according to a series of national

surveys carried out by Real Estate Alliance.The Real Estate Alliance Average House

Index concentrates on Ireland’s typical stock home, the three-bed semi, giving an accurate picture of the property market in towns and cities countrywide.

While every county in the State showed an increase in three-bed semi prices in 2014, the market slowed down in the Dublin area between September and December (Q4) with one area registering a -6.67% drop in prices.

The average semi-detached house nationally now costs €184,713, the latest REA survey has found – a rise of 2.63% on the Q3 figure of €179,981.

While semi-detached homes in Dublin recorded a 21.66% increase over the last year, the biggest rise was in the commuter counties and large cities such as Cork and Galway.

thE thREE-tiER mARKEt

REA were the first to correctly identify the concept of the three-tier market (Dublin, commuter counties and major cities, the rest of the country) in Irish property early in 2014.

Property in what is now termed Tier Two rose by 26.24% from €157,824 to €199,235.

And while the Dublin market slowed to just an 0.89% increase in Q4, and the commuter counties rose by 3.42%, the biggest upswing came in the rest of the country (or Tier Three), which saw a rise of 3.92% – the first time that rural Ireland had surged ahead in the figures all year.

The average three-bed semi in Dublin is now selling at €379,167, an increase of just over €3,000 on Q3, as the market in the capital stalled in Q4.

This price is almost twice that of the commuter county stock, and 2.5 times that of the average rural semi, which is priced at €147,587.

“our survey shows that in all areas of Dublin, parts of Cork City, Galway City, North Wicklow and Kildare, the price of the average semi detached house exceeds the Central Bank’s new threshold of €220,000 at which banks can lend 90% of the value,” said Real Estate Alliance CEo Philip Farrell.

“However, other parts of Wicklow, Kildare, Louth and meath all offer average housing under that limit for those looking to buy in the commuter belt with accessibility to Dublin.”

A cooling in thE mARKEt

Q4 saw the brakes being applied sharply as the Dublin market took a breather after a hectic year of growth.

While the capital as a whole saw just a 0.89% average rise from September to December, areas such as Lucan saw a fall of -6.67% as the price of the average semi-d went from €300,000 back down to €280,000.

All other areas in the city were flat in Q4

the year in reviewT

year in review

Carlow €132,500 15.22%

Cavan €65,000 30.00%

Clare €135,000 17.39%

Cork County €145,000 11.54%

Cork City €265,000 35.90%

Donegal €72,500 12.40%

North Co Dublin €255,000 20.00%

South Co Dublin €375,000 19.05%

Dublin City €379,166 21.66%

Galway €80,000 20.00%

Galway City €240,000 33.33%

Kerry €152,500 8.93%

Kildare €238,750 19.97%

Kilkenny €127,500 21.43%Laois €115,000 43.75%

Leitrim €77,500 14.81%

Limerick €140,000 16.67%

Longford €55,000 37.50%

Louth €145,000 22.36%

Mayo €190,000 15.15%

Meath €188,000 35.50%

Monaghan €100,000 17.65%

Offaly €115,000 17.35%

Roscommon €60,000 20.00%

Sligo €90,000 20.00%

Tipperary €120,625 7.22%

Waterford €140,000 7.69%

Westmeath €120,000 33.33%

Wexford €125,000 25.00%

Wicklow €210,000 25.49%

seMI PRIces county By countyDecember 2014 versus December 2013

PRICE OF 3-BED SEMI

*Commuter counties Louth, Meath, Kildare, Wicklow, Carlow, Laois plus Cork, Galway

DEC ‘13JUNE‘14SEPT ‘14DEC ‘14

Average(including Dublin)

Dublin City only Commuter counties * Rest of Country

153,

056

170,

074

179,

981

184,

713

311,

667

348,

333

375,

833

379,

167

157,

824

182,

353

192,

647

199,

235

121,

585

134,

659

142,

015

147,

587

December ‘14 versus September ’14

% VARIABLEDecember ‘14 versus December ’13

+20.68%

+2.63+0.89%

+21.66% +26.24%

+3.42%

+21.39%

+3.92%

PRIce of 3 BeD-seMI

except for South Dublin (5.56%) and the city centre (3.45%).

“Following an increase in property values of up to 30% over the previous 15 months, the market in Dublin took a breather in Q4,” said Philip Farrell.“Traditionally the capital is the first to rise and slow down in any turning market, and we saw this in Q4, particularly in popular first-time buyer markets like the Lucan area.

“much of this is due to the air of uncertainty that surrounded the introduction of the new Central Bank lending restrictions, and now that we have clarity here, we should see a return to a more normal market.

“our agents in Dublin expect prices to rise by six per cent this year. This is in comparison to our nationwide average expectation of a nine per cent rise in property prices in 2015.”

Evidence of a cooling in the market is seen by the fact that it took six weeks to sell the average property in Dublin in Q4, a week longer that Q3.

The same experience has been repeated in the commuter counties and major cities, which saw its time to sell go from six weeks to seven in Q4.

However, market activity continued apace in Tier Three, with properties in the rest of the country still taking seven weeks to sell as in Q3.

Just how far this market has grown in 2014 is evidenced by the fact that these properties were taking 13 weeks to sell a year previously.

thE REtURn of thE bAnKs

Just 38% of all property sales nationwide are distressed, down from 43% in December 2013, but slightly up on the September 2014 figure of 37%.

But the biggest change in buying habits in 2014 has been the return of the banks to the marketplace with the amount of cash transactions dropping from an average of 66% in December 13 to 44% in December 2014.

Dublin has shown the greatest increase in mortgage transactions. In September 2014, 43% of all sales in Dublin were cash buyers, whereas by the close of the year, this had dropped to 29%.

This figure dropped from 39% to 35% in the commuter belt and Tier Two but fell just three points from 48% to 45% in the rest of the country, as buyers with available funds continued to purchase properties they perceive as good value.

A moRE pREdictAblE 2015

We are now seeing a welcome return to a normally functioning market where you are likely to see less volatility and, thankfully, more predictability. Because we have

experienced between 12 and 18 months of recovery in the residential sector you are now seeing less volatile numbers coming in from many counties.

As the market started to rebound, some of the high percentage recoveries that we saw in 2014 were quite misleading due to the limited number of transactions involved, and the low price base that we were coming off.

REA identified the concept of the three-tier

market early in 2014, and the market is still performing on this basis.

However, our agents are now predicting for 2015 that there will be a 50% greater increase in property outside of Dublin (9%) than in the capital (6%).

The regions have been playing catch-up over the past 18 months, and it is interesting to see that the Dublin market has already started to take a breather, which, under the current

•

DEC ‘13JUNE‘14SEPT ‘14DEC ‘14

DublinCity only

Commutercounties *

Rest ofCountry

*Commuter counties Louth, Meath, Kildare, Wicklow, Carlow, Laois plus Cork, Galway

48%

66%

53%

45%

66%

53%

48%45%

66%

53%

48%

45%

Average(incl. Dublin)

66%

53%48%

45%

REA Average HousePrice Index 2014

tIMe tAKen to sell (WeeKs)

Carlow

Cavan

Clare

Cork County

Cork City

Donegal

North Co Dublin

South Co Dublin

Dublin City

Galway

Kerry

Kildare

Kilkenny

Laois

Leitrim

Limerick

Longford

Louth

Mayo

Meath

Monaghan

Offaly

Roscommon

Sligo

Tipperary

Waterford

Westmeath

Wexford

Wicklow

8 6 6

12 12 12

8 12 6

24 18 16

4 3 3

12 10 8

9 10 10

3 4 6

4 5 6

4 4 6

10 11 9

8 8 12

10 9 9

8 12 12

8 8 8

8 8 4

16 8 6

6 5 5

6 6 3

6 5 6

8 7 6

12 8 7

8 5 5

20 9 8

12 10 9

9 7 6

12 4 4

8 8 8

3 53

DECEMBER ‘14

SEPTEMBER ‘14

JUNE ‘14

year in review

oUR SURVEy SHoWSTHAT IN ALL AREAS

oF DUBLIN, PARTS oF CoRK CITy, GALWAy

CITy, NoRTH WICKLoW AND KILDARE, THE

PRICE oF THE AVERAGESEmI DETACHED

HoUSE ExCEEDS THECENTRAL BANK’S

NEW THRESHoLD oF €220,000 AT WHICH

BANKS CAN LEND 90% oF THE VALUE

DEC ‘13JUNE‘14SEPT ‘14DEC ‘14

DublinCity only

Commutercounties *

Rest ofCountry

*Commuter counties Louth, Meath, Kildare, Wicklow, Carlow, Laois plus Cork, Galway

48%

66%

53%

45%

66%

53%

48%45%

66%

53%

48%

45%

Average(incl. Dublin)

66%

53%48%

45%

REA Average HousePrice Index 2014BuyeRs % cAsH V MoRtGAGe

circumstances, is to be welcomed. We have experienced a 30% increase in value in Dublin over the past 18 months, and historically, any country’s capital is the first to rise and the first to fall in a changing market.

It is interesting to note that our agents predictions for 2015 are consistent with this.

pREssURE on thE REntAl mARKEt

FoR a period for five years, the construction sector ground to a halt and we are still feeling the effects of this through the lack of availability of new homes.

In an average year there is a natural demand for 25,000 new homes in Ireland.

In 2015, it is expected that the supply may only be in the region of 15,000 – which means that demand will continue to outstrip supply, but the barrier of deposit requirements may involuntarily price some potential buyers out of the market.

This, in itself, will create additional pressure in the rental market. The average rent in Ireland increased by 10% in 2014 and it is anticipated that this year’s rise could come close to that.

our survey has also shown that the

percentage of cash buyers has reduced significantly from as high as 70% of transactions 18 months ago, to approximately 40% of all transactions today.

one of the obvious reasons for this is the return of the lending institutions to the mortgage market, and conversely, the requirement of a 20% deposit could reverse this trend back toward the cash buyer.

thE lAnd mARKEt in 2014

LooKING back at 2014 a number of variables affected land prices. These included the rush on the part of dairy farmers to buy land in advance of the abolition of the milk quota system.

The impact of this was particularly evident in munster where a survey of successful auctions in the province showed the per acre price had jumped by 18% when compared to 2014. John Stokes of REA Stokes and Quirke recorded an exceptional price for a 75ac farm outside Clonmel when he sold it under the hammer for €1.56m or €20,800per acre.

According to Dermot Conlon of REA Gunne Property, Carrickmacross land in monaghan held its own in 2014. Reflecting on the sale of a 50ac farm at mullaghamacateer that

made €10,000 per acre he said, “Location is everything, good accessible land will make good money.”

There is no doubt the lingering beef crisis in 2014 affected prices in the drystock country of Connacht and Leinster while stagnation in the tillage sector equally had an impact. In a surprising finding land prices in the tillage heartland of south Leinster fell by up to 17% when compared to the previous year.

Prices in North Leinster fell by 5.7% and in Connacht Ulster by 2.8%. These figures are based on an analysis of 166 successful auctions that took place throughout the country in 2014 in a survey compiled by the Farming Independent.

The weather influences everything in farming and, of course it had an impact on land prices. In 2014 we had an exceptional year in terms of the weather with a long and pleasant summer delivering bumper fodder and tillage crops and leaving land in great order.

Whether farmers were too busy to attend the auction rooms or walk land, sales were quieter until the latter part of the year when a flurry of auctions took place. The change in the Capital Gains Tax regime also contributed to an increase in sales towards the end of the year.