Houses
The autumn market is now up and running. We are glad to report that there is a general increase in activity levels. Buyers are beginning to see value and as such are being tempted back into the market. However, conditions remain difficult and owners with properties on the market that are not selling are having to drop the price to make them more appealing to prospective purchasers.
There is a shortage of family homes in established areas within the M50 at present. In spite of this, we do not foresee a dramatic increase in stock levels of such properties until at least spring 2012.
A number of high profile properties were put on the market in recent weeks. One notable offering is Walford on Shrewsbury Road in Ballsbridge. Lisney is currently recommending an AMV of €15 million for this property. When it was last offered for sale in 2005, it was reported to have sold for approximately €58 million. The current AMV represents a 75% drop on this price.
There have been a few notable sales around the city in recent months and terms have been agreed on a number of high-end properties. The task of moving properties from terms agreed to signed contracts remains arduous due to the difficulty obtaining finance.
We are firmly of the view that there is a market for all types of properties, once the quoting price is realistic. By way of example, in 2006 Lisney sold a house on Park Avenue in Sandymount for approximately €9.4 million. This house recently came back to the market at an AMV €1.925 million (80% less), but terms were agreed for significantly in excess of this figure. On the same road last May, we offered a smaller house, number 37, for sale by public auction with an AMV of €1.75 million. The property was sold at auction for €1.705 with four bidders in a packed auction room. These sales were achievable because the quoting prices were sensible.
Apartments
Conditions in the apartment market are very difficult. With distressed sales taking place, values of such units are declining rapidly, the pace of which is much ahead of traditional houses. Last January, Lisney sold a two bedroom unit in the Sweepstakes, Ballsbridge for a price in excess of €300,000. A similar unit in the same development recently came to the market quoting €199,000 and was sold very quickly. Its sale clearly illustrates the extent of the drop in values over a very short time-frame. What is very clear from the three Allsop/ Space auctions is that there is demand for apartments providing the price is right.
Prices
CSO statistics show that residential property prices (for all housing types) in Dublin have fallen by 50.37% since April 2007, i.e. the month they perceive to be the peak of the market. Houses have clearly performed better falling by 48.48% compared to apartments, which have fallen by 57.14%. These official government statistics are based on mortgage draw downs in eight lending institutions. This poses a number of issues. Firstly, there is a time lag in the data and secondly, it ignores cash purchasers who now make up a reasonable section of the market.
Lisney research shows that the peak of the market was actually slightly earlier, in May 2006. From this time, our index of prices illustrates that Dublin property prices (all housing types) have fallen by approximately 61.5%. What is also established is that apartments and very large homes are down by 67% and 71% respectively, whilst mid-sized, family homes are down by about 58%. Lisney’s index of prices is based on our knowledge and experience in the market and is not solely based on actual transactions as with the CSO index.
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