First-time buyers are now finding themselves in an ideal position to snap up a property of their choice in many parts of Ireland. “At the moment it’s a nice time for first-time buyers because you can buy a good house in a good area at a reasonable price. Houses are selling but prices have not started to increase,” says Mary Dillon, head of Sherry FitzGerald Countrywide. Dillon says the market outside of Dublin is about a year behind the market in the capital. “This year in rural Ireland we’re seeing a good demand. Stock is selling, whereas a year ago it wasn’t.”
Caroline Kelleher, senior economist at DKM and author of the myhome.ie barometer, says while there is a stark price difference between Dublin and the rest of the country, there is also a difference between counties.
“There is a three-tier market: Dublin, other key urban areas and peripheral counties. In Cork and Galway there are signs of the market stabilising but in places like Kerry, Mayo and Donegal the market still hasn’t turned a corner.”
Cities such as Cork and Galway are starting to see increased competition for three-bedroom semis popular with first-time buyers, with reports of competitive bidding on properties and the occasional sale above asking price.
Rural areas around these cities are not far behind as they tend to follow the same trends. “The property market bleeds out into those counties because people are able to commute from suburban parts of the county,” says Kelleher.
While demand may be slowly increasing across the country, housing remains considerably more affordable in other parts of the country than in Dublin, she says. At the end of 2013, a married, working first-time buyer couple could expect to spend 16.3 per cent of their net income to fund a mortgage outside of Dublin, compared to 23.7 per cent in the capital.
With affordability in Dublin worsening and the price differential between Dublin and the rest of the country at 28 per cent and rising, it is likely that first-time buyers will look to widen their search into commuter-belt counties around Dublin. Estate agents are seeing evidence of supply shortages in Wexford and Wicklow and Kelleher predicts price increases in Meath and Kildare. This demand is unlikely to change in the short term as the Dublin market continues to struggle with supply.
Cork
While the Cork market is becoming more competitive, first-time buyers are holding out to find something in their preferred location rather than looking further afield, says Alan Browne of Murray Browne Auctioneers.
“First-time buyers are generally looking at starter family homes such as three-bed semis with proximity to schools. With prices at this level they could be in relatively good locations and buyers are eager to get them. Viewings have increased, particularly since Christmas.”
With prices showing signs of stabilising in 2013, there are indications the market may have reached its lowest point in Cork. Browne says the shortage of first-time buyer properties in Cork city and suburbs is compounded by the fact there are no new-builds.
He adds that while there is a huge appetite for any property in good condition in the city, there is a far lower level of activity in rural areas.
Galway
The Galway market is “extremely buoyant” with first-time buyers, says Colm O’Donnellan of O’Donnellan & Joyce Auctioneers. “Sales have increased dramatically in the last six months. First-time buyers are out in force. No new construction means there’s pent-up demand.”
He says some popular areas in the city are beginning to see prices rise. “There’s a shortage of three- and four-bed semi-detached houses – especially in Salthill, Knocknacarra and Renmore. It’s not unusual to find five or 10 people bidding on houses in those localities.”
O’Donnellan says that while value can be found in apartments, first-time buyers can find themselves competing with investors. The best value is to be found in rural areas where there is less demand.
Overall, Galway prices continued to decline towards the end of 2013, although the rate of decline fell. The average price of a three-bedroom semi in Galway is now €168,000, down 43.5 per cent from the peak.
Limerick
While asking prices in Limerick city were down 10 per cent at the end of 2013 from a year earlier, Lisa Kearney, director at Rooney Auctioneers, says she has seen a marked increase in the number of enquiries and viewings over the past six months.
“The number of sales recorded has also steadily increased compared to the previous year and we are actively selling in all areas at the present time,” she says. “All in all, we are of the opinion that the market has improved considerably and is improving month on month.”
She says homes popular with first-time buyers, such as terraced, semis and some detached properties, are unlikely to see further price decreases. “In fact, in some cases we have found that competitive bidding has resulted in homes selling for prices in excess of their asking price. This is also resulting from a shortage in supply of good family homes .”
While she sees an increase in potential purchasers arriving armed with loan approvals, she says a lack of additional funds mean they are seeking houses in turnkey condition.
Waterford
Waterford experienced its biggest price drop to date in 2013, with prices falling 21.9 per cent. It now has the lowest asking price of any of the urban areas, with the average price of a three-bedroom semi coming in at €135,000 at the end of 2013.
Warren Palmer, owner of Palmer Auctioneers, says the market is stagnant. “At the moment there is a lack of good-quality homes up for sale. A lot of people paid a lot of money for their homes during the boom and can’t afford to sell.”
However, he says that when property does come on the market, there are ready buyers. “Three- and four-bed semis are selling well. First-time buyers seem to be getting finance. But the majority of houses we’ve sold this year are cash buyers, either investors or expats moving back from abroad.
He says the story is similar in rural areas. “There’s a lack of properties and very little movement in the market. Some properties on the market are still very pricey. People aren’t going to pay over the odds.”