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2012 saw Dublin/country house price rift

Wednesday, February 06 10:59:41

The average prices of family homes in Dublin stabilised and marginally increased in 2012 while there were further declines in house prices around the rest of the country, albeit at a slower pace than 2011.

That's according to the Society of Chartered Surveyors Ireland (SCSI) annual survey of its estate agent members published today.

It suggests that average prices of second-hand three and four bedroom semi-detached family homes in Dublin increased by 2.7pc and 1.1pc respectively in 2012, compared to declines of 12.6pc and 13.6pc in 2011.

In Leinster, the average price of a second-hand 3-bedroom semi detached house declined by 7.7pc. This compared with a 16.8pc decline in 2011.

In Munster, the average price of a second-hand 3-bedroom semi detached house declined by 7.6pc. This compared with a 9.3pc decline in 2011, while in Connacht, the average price of a second-hand 3-bedroom semi detached house declined by 7.1pc. This compared with a 15.2pc decline in 2011.

The SCSI said that the Mortgage Interest Relief (MIR) deadline stimulated demand in the final quarter of the year and that a lack of supply of family-type homes, particularly in Dublin, led to modest price increases in certain areas.

Roland O'Connell, President of the Society of Chartered Surveyors Ireland said the figures showed that Ireland in 2013 was no longer dealing with a property crisis, but the legacy of that crisis.

"How we deal with the legacy issues under our control will have a major bearing on the future of the property market in this country. 2012 was very much a year of transition with increasing levels of both commercial and residential transactional and rental activity being experienced by a growing number of agents in different sectors."

"The lack of uniformity in property values and the emergence of 'micro markets' - suggests that there will not be a single point at which the market hits the floor and recovery begins. Rather different types of property in different regions will experience variations in peak-to-trough prices and will recover at different times," Mr O'Connell said.

He pointed out that increased demand in 2012 from people wishing to move from rented accommodation to purchase family homes and a shortage of suitable property in some urban areas led to price stabilisation and even modest increases in some of these 'micro-markets'.

"However, the situation around the country is less certain. While the rate of decline has slowed, values continued to drop and it remains to be seen if there will be a stabilisation later in 2013 and what effect the Local Property Tax (LPT) will have on property values" he said.

The SCSI survey also suggested that there continued to be strong levels of activity in the residential rental market in 2012 with rents increasing by an average of 1.3pc nationally and 3pc in Dublin.

"Family homes are in demand for rental, tenancies are typically lasting longer and a new trend whereby people are renting out their home and renting another property, either a larger home or closer to workplaces is emerging," Mr O'Connell said.

According to the SCSI/IPD Index, 2012 was the first year of positive returns for the Irish market since 2007. However, activity levels in the commercial property market were relatively low in 2012, particularly in relation to older stock in secondary locations.

In Dublin, rents for prime 3rd generation offices declined to E310 per sq metre in 2012 from E320 in 2011 and prime city retail rents declined to E4,135 in 2012 from E4,532 in 2011.