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    Couple earning average wage cannot afford cheapest new apartments in Dublin

    A couple earning average wages still cannot afford even the cheapest new apartments in Dublin, according to a new report from the Society of Chartered Surveyors Ireland.
    The Real Cost of New Apartment Delivery Report also found most types of apartments are not economically viable for developers to build for sale.
    The society’s report found that the situation has improved since its previous study in 2017, with development costs decreasing for two categories of apartments and economic viability also improving.
    It stated this was the result of the relaxation of building regulations brought in by ministerial guidelines in 2018, particularly the reduction in car parking spaces and the removal of a requirement that apartments have dual aspect or natural light in two directions.
    However, it found that the cheapest two-bed apartment available, which would be a low-spec build in a low-rise suburban development, had a sales price of €375,000.
    This would require a deposit of €37,500 and the buyer to have an annual income of at least €96,000.
    A couple on average incomes would be earning just €88,000 between them.
    The President of the SCSI said supports are needed and that the new Shared Equity Scheme should give apartment buyers a longer payback period because of the higher costs.
    Micheál Mahon also said it takes up to 18 months to get a 100-unit scheme to planning and judicial reviews are causing further delay.
    “Delays by utility companies, especially Irish Water, are also proving extremely costly and need to be addressed. As this report shows, apartment construction is a costly business,” he said.
    The report set out four-category apartment types consisting of low-rise suburban, which is three storeys high; medium-rise suburban (three to six storeys); medium urban (five to eight storeys) and high-rise urban (nine to 15 storeys).
    Each category had a range depending on whether the development was high-spec or low-spec.
    It calculated that the all-in cost of delivering medium-rise two-bedroom apartments in Dublin ranged from €411,000 for a low-spec unit in the suburbs to €581,000 for a high-spec one in the city.
    A profit margin of 15% is then added to see which categories are economically viable for developers to build for homebuyers.
    It found that low and medium-rise suburban are viable if they are low-spec, according to current market prices. This is an improvement since 2017 when only low-rise suburban fell into that category.
    ‘The Real Costs of New Apartment Delivery 2020’ report also found that the actual cost of building a medium-rise apartment makes up 47% of the overall costs.
    Other so-called “soft costs”, such as VAT, levies, and fees, make up 42%, with site costs amounting to 11%.
    The overall development costs for medium-rise developments have gone down by up to 9% while most categories increased.
    Chair of the SCSI working group Paul Mitchell said Build To Rent developments are more economically viable as there are fewer restrictions relating to the apartment mix, car parking and size.
    He said they are also more attractive to pension funds, which can take a longer-term view of the asset.
    Mr Mitchell added: “It is not surprising therefore that 76% of the units analysed are for rental rather than sale.”
    Meanwhile, another report found that Covid-19 had caused a 21% decline in property transactions across the country in the 12 months to November last.
    The GeoView Residential Buildings Report View found that in Dublin, the area with the highest number of property transactions was Dublin 15, which includes Blanchardstown and Clonsilla.
    The postcode with the lowest average residential property price was €230,233 in Dublin 10, which includes Ballyfermot, while the highest was €771,542 in Dublin 6, which includes Ranelagh. More

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    Estate agents struggling to meet demand for property, survey finds

    Estate agents say they are struggling to meet demand for property at present, especially from first-time buyers.
    A survey of 800 agents, carried out by the Society of Chartered Surveyors Ireland, found that over two thirds predicted property price increases in the year ahead with 24% expecting prices to remain the same and 8% anticipating reductions.
    The average price increase in 2021 would be of the order of 4%, the report concludes, with lack of supply acting as the main driver of prices.
    Property prices in Dublin are expected to see average increases of 3%, while Connacht-Ulster – which has some of the lowest prices – will see an increase of 6%.
    An increase of 4% is predicted for Leinster while prices are forecast to increase by 5% in Munster.
    The report’s findings underline the scale of the supply challenges facing the market.
    While three quarters of agents reported sales instructions increasing or remaining the same in the third quarter, by the final three months of the year the figure had dropped to just over half with the remainder reporting a falloff in instructions.
    Several agents said the slowdown was ultimately due to lack of supply with potential vendors deferring selling due to the lack of alternative options.
    The Covid-19 pandemic largely dictated the market in 2020 and it looks like that trend will continue in 2021.
    “The transition to working from home has led to a reordering of priorities and is driving interest in larger properties in regional locations with good broadband and lots of amenities as well as holiday homes in secondary locations,” TJ Cronin, Vice President of the Society of Chartered Surveyors of Ireland, said.
    “The trend away from urban areas is also reflected in the survey’s price projections,” Mr Cronin stated.
    “While Covid-19 has badly affected certain sectors, it has enabled prospective buyers who work in areas which haven’t been hugely impacted, such as pharma, tech, financial and the public sector, to increase their savings.
    “We’ve also seen a big inflow of Irish people returning from abroad, to Dublin in particular, and this has underpinned prices at the upper end of the market. In a situation where you have very limited supply – 83% of agents report having low levels of stock available in Q4 – the fear of missing out on a property will very often trump the fear of paying over the odds,” he added.
    According to an analysis by consultants EY, the construction sector will not return to 2019 levels of completions until 2024 at the earliest.
    It is estimated that in excess of 21,000 housing units were completed here in that year with the figure expected to have dipped below the 20,000 mark once again 2020.
    A newly instituted closure of building sites in recent weeks will likely impact supply in 2021.
    The Central Bank, among others, estimates that up to 35,000 units need to be completed every year in Ireland to keep up with demand.
    The SCSI concludes that housing supply and demand equilibrium may not be achieved until after 2030.
    By that stage, it predicts the sector would need to be building in excess of 60,000 units per year, over three times the current output and almost double the official estimates. More

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    Guidelines for property viewings updated due to rising level of Covid-19 cases

    Updated guidelines regarding property viewings have come into effect from today.
    The Property Services Regulatory Authority (PSRA), the Institute of Professional Auctioneers & Valuers (IPAV) and the Society of Chartered Surveyors Ireland (SCSI) have updated their ‘Property Services Providers Guidance to implementing Plan for Living with Covid-19‘ document which was released last year.
    The document was originally published last October to guide agents on how to operate under the various levels of the Government’s Living with Covid strategy.
    Given the rising number of Covid-19 cases over the Christmas and New Year period, new restrictions have come into effect today which will be reviewed on January 31st.
    The biggest change is that there will now be no in-person viewings of properties unless you’re already at the sale agreed stage with contracts signed.
    A statement from the PSRA said: “Due to the increasing and deeply concerning daily COVID-19 case numbers in Ireland over the very recent period, Government has requested that further tightening of restrictions in delivery of property services be addressed and implemented.
    “Accordingly, IPAV, PSRA and SCSI have reviewed and updated the Property Services Providers Guidance to Implementing a Plan for Living with Covid-19.
    “The revised Guidance document is updated to reflect the further tightening of restrictions in the provision of property services effective from 13 January 2021, which will be reviewed on 31 January 2021.
    “It is critical that you read and fully understand the new section ‘Level 5 Restrictions effective on 13 January 2021 for review on 31 January 2021’ in the document.
    “In order for property service providers, customers and the public remain safe and well, you are requested to comply with these new revised guidelines during the provision of all property services.”
    The guidance can be read in full here. More

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    Residential property prices decrease by 0.8% nationally in the year to September

    Residential property prices decreased by 0.8% nationally in the year to September, according to the latest figures from the Central Statistics Office (CSO).
    This compares to a decrease of 0.9% in the year to August and an increase of 1.1% in the twelve months to September 2019.
    In Dublin, residential property prices saw a decline of 1.8% in the year to September, while property prices outside Dublin were 0.1% higher.
    In Dublin, house prices decreased by 1.6% and apartment prices decreased by 0.6%. The highest house price growth in Dublin was in Fingal at 2.1%, while Dublin City saw a decline of 4.2%.
    Outside Dublin, house prices were up by 0.2% and apartment prices up by 0.4%. The region outside of Dublin that saw the largest rise in house prices was the Midlands at 4.0% – at the other end of the scale, the Mid-West saw a 5.7% decline.
    Overall, the national index is 17.6% lower than its highest level in 2007. Dublin residential property prices are 22.7% lower than their February 2007 peak, while residential property prices in the Rest of Ireland are 20.1% lower than their May 2007 peak.
    Property prices nationally have increased by 83.7% from their trough in early 2013. Dublin residential property prices have risen 91.5% from their February 2012 low, whilst residential property prices in the Rest of Ireland are 83.9% higher than at the trough, which was in May 2013. More

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    MyHome.ie Webinar: What the Level 5 restrictions mean for the property industry

    Following on from the country’s move to Level 5 at midnight and the publication of the new guidance protocols published by the PSRA, IPAV and the SCSI, we caught up with IPAV CEO Pat Davitt for a special edition webinar where he outlined what the new protocols mean for agents.
    In the Webinar, Pat clarifies that:
    Agents can travel beyond their 5km radius or across county boundaries to carry out tasks associated with the business
    Agents will not be held responsible for providing a viewing to someone who has travelled more than 5km for it or across county boundaries
    All estate agent offices should remain closed in Level 5
    The new protocols were signed off on by Government so are fully approved
    Check out the full chat with Pat below….
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    The full document containing guidelines for the various levels in the Government’s Living with Covid plan can be found here.

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    Residential property prices down 0.6% in the year to August

    Residential property prices decreased by 0.6% nationally in the year to August, according to the latest figures from the Central Statistics Office (CSO).
    This compares to a decrease of 0.6% in the year to July and an increase of 1.9% in the twelve months to August 2019.
    In Dublin, residential property prices saw a decline of 1.6% in the year to August – house prices decreased by 1.4% and apartments increased by 0.1%. The highest house price growth in Dublin was in Fingal at 1.7%, while Dublin City saw a decline of 3.4%.
    Residential property prices in Ireland excluding Dublin were 0.3% higher in the year to August, with house prices up by 0.4% and apartments down by 0.7%. The region outside of Dublin that saw the largest rise in house prices was the South-West at 5.2% – at the other end of the scale, the Border saw a 2.7% decline.
    Overall, the national index is 17.6% lower than its highest level in 2007. Dublin residential property prices are 22.6% lower than their February 2007 peak, while residential property prices in the Rest of Ireland are 20.1% lower than their May 2007 peak.
    Property prices nationally have increased by 83.8% from their trough in early 2013. Dublin residential property prices have risen 91.8% from their February 2012 low, whilst residential property prices in the Rest of Ireland are 83.9% higher than at the trough, which was in May 2013. More

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    Help-to-buy scheme extended in Budget 2021

    The help-to-buy scheme for first time buyers was extended to the end of 2021 in the Budget on Tuesday.
    The scheme helps first-time buyers with the deposit needed to buy or build a new house or apartment with relief of the lower of 10% of the value of the property or €30,000 available.
    Public Expenditure Minister Michael McGrath signalled what he termed a “radical reappraisal on how we deliver housing.” in his Budget 2021 speech.
    Announcing a record level of funding for the Department of Housing – an increase of €773 million on last year – he said the Government will place a “much greater emphasis on building social and affordable housing.”
    He said his policy will deliver 9,500 social homes next year.
    The Stamp Duty Residential Development Refund Scheme due to expire on 31 December 2021 will also be extended to operations commenced by 31 December 2022.
    Stamp Duty Residential Development Refund Scheme provides for refund of a portion of the Stamp Duty paid on the acquisition of non-residential land where that land is subsequently developed for residential purposes.
    Minister for Finance Paschal Donohoe said that due to the impact on the sector of Covid-19, and also to certain issues that have been brought to his attention since its introduction, he is to make a number of changes to it this year.
    Apart from the extension to the expiration date, the time allowed between commencement and completion of a qualifying project is being extended by six months to two-and-a-half years.
    Michael McGrath allocated €110m for affordable housing and cost rental schemes in Budget 2021.
    Announcing the funding, the Minister said that thousands of people find themselves locked out of the property market due to high rents.
    He announced a total of €5.2 billion to the Department of Housing, Local Government and Heritage next year.
    Mr McGrath said that an extra €500m would facilitate the construction of 9,500 new social housing units in 2021 and a total of 12,750 units will be added to the social housing stock.
    He said there would be €65m to fund deep retrofitting of social housing stock.
    Minister McGrath promised an additional €22m to support homelessness programmes and the introduction of a cold weather initiative.
    He said a basic need in life is to have secure place to live and he said that for too many people in Ireland that need remains unfulfilled.
    Tackling homelessness was a top priority for Government, he said.
    Minister McGrath said that the country was able to deliver public housing when it was much poorer than it is today, and he said they would do this again.
    He said the Land Development Agency would play an important role in the Government’s affordable housing strategy into the future.
    The Minister said that the agency would have over €1.2bn of funding to progress the range of projects already under way.
    Responding to the Budget 2021 announcement, Dr David Duffy, Director of Property Industry Ireland (PII), the Ibec group for businesses working in the property sector, said: “Property Industry Ireland welcomes the commitment in the Budget to housing and capital spending.
    “The reference by Minister McGrath that the housing crisis will be solved through both public and private delivery of housing is positive. PII also welcomes the announcement of an Affordable Purchase Shared Equity Scheme for first time buyers.
    “While the budget allocated will mean that it will have limited impact on making more homes available, PII is ready to engage with the Department of Housing on the structure of the scheme to ensure that families can be in new homes as soon as possible.” More

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    MyHome.ie Webinar – Real Estate Alliance chairman Anthony McGee

    We’re delighted to bring you another MyHome.ie Webinar today.
    In this week’s episode, we chat to Real Estate Alliance chairman Anthony McGee.
    Anthony, who runs REA McGee in Tallaght, discusses the impact of Covid-19 on the business, the launch of their new product BidNow and on the trends he has noticed in the Irish property market in recent months.
    Check it out below…
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    For further details on Real Estate Alliance visit www.realestatealliance.ie. REA McGee’s website can also be found here. More