Much talk has been made in recent months about rising house prices, however, it is accepted that these rises are coming from exceptionally low levels in many areas around the country so perhaps the best test of local market recovery is the volume of transactions taking place.
The total number of residential sales nationwide this year is running at close to 15,000 (not all of August sales are recorded in that figure), this compares with a figure of approximately 13,900 for the same period last year. While it is not a huge increase, it is an increase nonetheless and puts the market well on track to achieve in the region of 25,000 to 26,000 residential transactions for the entire year. Undoubtedly, this is still below the levels we would expect to see in a fully functioning, healthy market; however, when you consider that many pockets of the country – for example, Carlow, Offaly, Longford, Leitrim and Monaghan – have each seen less than 185 sales so far this year, the total figure begins to look promising for those counties experiencing a surge in the numbers of people buying and selling.
Each month of 2013 so far has recorded a sizeable increase on the preceding month, with the number of transactions in January totalling 456 and this figure rose steadily and consistently to reach 910 transactions in July – which, historically, would be considered a quiet time in the residential market.
Unsurprisingly, Dublin has had the lion’s share of activity with well in excess of 5,000 sales; also, the commuter belt – with the exception of Carlow – has seen its busiest levels since 2007. Kildare in particular has thrived over the past six months, with local agents running low on quality family homes. While apartments in that county are starting to sell, they are still achieving relatively low prices as demand for that type of housing is still weak. This is especially true outside of the larger towns.
The regional cities have each seen a marginal increase in the volume of sales, with Limerick continuing to lag behind. The biggest surprise perhaps is the Wexford market, which continues to thrive and out-perform the commuter belt counties, including Wicklow, for the second consecutive year. There is no economic explanation for this, there has been little in the way of new investment in the area to promote employment or prospects. Certainly the road infrastructure has improved but this is equally true towards the West of Ireland, where the recovery has not been so buoyant. From speaking to local agents, there is a feeling that returning ex-pats are choosing the area for easy access to Dublin, Rosslare and Waterford; scenic areas of natural beauty and a quieter pace of life – not to mention the sunny climate. Apparently, Wexford boasts more days of sunshine per year than any other county in Ireland.
Elsewhere, the home-buyer trend towards turn-key, modern houses, less than 15 years old and close to amenities is leading to a shortage of suitable family homes in most areas at this stage. However, it is important to note that this is not reflective of supply and demand in the marketplace but rather, it is evidence of popular preference. This is, in part, driven by the mortgage companies who favour single drawdown, rather than allowing the mortgage to be drawn down in stages – as we saw during the boom years – which would enable buyers to purchase and then renovate older properties. This one simple change in lending policy would open up a whole new market of dilapidated homes that are currently selling across the country for as low as 20,000 euro, well below the site value. It would also halt the further decimation of rural areas. While it is tempting to start building again when faced with genuine housing shortages, making use of our existing buildings, either to upgrade them or change them so that they suits the needs of our homebuyers, is the more efficient option. Planners need to start looking at the market in a more holistic way. They previously had limited power to grant permissions for one-off housing, yet, it now appears that they have limited power to refuse larger, and entirely unnecessary schemes. The clearest example of this was highlighted by a recent planning application submitted to Longford Local Authority. The developer in question sought permission for 250 new houses in a town with 1,100 vacant homes already, the most ridiculous part of this is the Local Authority’s inability to refuse the application as the site is zoned for residential development. So far this year, Longford has recorded a mere 143 transactions. Last year, there were less than 100 sales across the county. It is unclear who will buy or even occupy the existing homes available, with a less than buoyant rental market in the area, an overhang of rental stock and some of the lowest rental rates in the country. We really must question how is this still happening, have no lessons been learned?