What Dublin buyers are really paying...
What’s your house really worth? Secret house sale data for the first four months of the year shows that in some cases, houses in the Dublin area are selling for half what the owners wanted. And nearly 20 per cent of buyers are paying cash...
DATA FROM the sale of almost 200 homes in the Dublin area seen by The Irish Times show that house prices in the capital have dropped by up to 52 per cent since 2007.
The data relates to 192 sales conducted by one of the country’s leading estate agencies in the first four months of 2009.
The properties represent a wide range of homes at virtually every level of the market and in most postal districts. The majority of the 192 homes sold had been on the market since 2008, with some properties on sale since 2007.
Analysis of the sales show that homes at the lower end of the price scale have fared best, selling for between 5 and 20 per cent below asking prices. In a very small number of cases starter homes actually attracted bids over the asking price. Two of the 192 properties sold for above their asking prices and both were in the €300,000 to €400,000 bracket. In both cases the buyers paid around €10,000 over the asking price in competitive bidding.
Sellers in the middle market, with houses priced between €500,000 and €1 million have seen the values of their homes fall by between 30 and 45 per cent. On the plus side, there is a good deal of activity at this level of the market as buyers identify value in solid family homes in top suburban locations.
Houses priced in the €1 million-€2 million market have seen their value halved, where they are selling at all. Of the 192 properties sold, just 14 fetched over €1 million.
A surprisingly high number of buyers are paying cash – 19 per cent of the sample, while AIB has emerged as the foremost lender.
The prices provide the first true snapshot of the current state of the second-hand housing market in over a year, since auctioneers stopped revealing the sale prices they’d achieved following a row with the National Consumer Agency (NCA) (see panel on page 6).
While the information relates to sales from one estate agency chain only, the geographical spread and the range of house types, from apartments, through three and four-bedroom semis up to large period houses, provides a valid view of the market.
Properties that have been on the market for over a year have seen the most significant drops. For instance, an apartment in Clontarf that went for sale in late 2007 at around €430,000 sold last month for just over €300,000, a drop of 39 per cent.
In Blackrock, a substantial family home first offered a year ago at €1.6 million was eventually sold for around €850,000 – a 47 per cent drop.
In Dún Laoghaire, a period house that was on the market for 12 months dropped from over €1.5 million to around €900,000, a drop of around 44 per cent. A large country-style property in south Co Dublin that came on the market a year ago at €4 million eventually sold for €1.9 million – a drop of 52.5 per cent.
Across the city in Dublin 5, a spacious detached house offered in 2007 at around €750,000 eventually sold for just under €400,000 – 48 per cent lower. In Dublin 6, an attractive semi on one of the better roads of Rathgar was offered early in 2007 at €1.9 million but sold early in 2009 for around €1 million – 45 per cent below the original asking price. In Stillorgan, a typical four-bedroom semi sold for 36 per cent below its asking price, after 16 months on the market.
The market has continued to correct through the first quarter of 2009. Sellers who put their homes on the market in the January-March period invariably had to drop prices to achieve a sale. For example, in Dublin 9, a terraced three-bedroom house that came on the market in February at close to €400,000 was sold shortly afterwards for 9 per cent less.
In Stepaside, a modern duplex on the market at just over €400,000 at the end of 2008 sold for €360,000 in early 2009, a drop of around 8 per cent.Neighbourhoods that saw big price inflation during the property boom have seen corresponding drops since the peak of the market.
The correction has been severe in parts of Dublin 18 – Foxrock and Carrickmines in particular, where there is an oversupply of newly built high spec homes. Two large contemporary homes in Dublin 18, on the market since late 2007 and early 2008 respectively, were both sold at approximately €2 million each – around 50 per cent less than their original asking prices.
Parts of Dublin 4 have also taken a big hit on prices. In Sandymount for instance, an attractive four-bedroom semi with a garage that last year was expected to make over €1 million eventually sold for €700,000, while nearby, a three-bedroom semi that had been priced at close to €900,000 in late 2007 finally sold for just over €450,000 – a 48 per cent drop.
Buyers at the lower end of the price scale have not been able to avail of such large discounts, since starter and trade-down home prices seem to have held up, pricewise, better than their more salubrious neighbours.
For instance, in Sallynoggin a refurbished former Corporation house on the market at over €350,000 sold for just 4 per cent less. In Clontarf, an apartment priced at €280,000 was sale agreed at a modest 10 per cent below the asking price; in Clonee, Dublin 15, a modern three-bedroom semi fetched just over €300,000, 7 per cent down from its asking price, while in Sutton, a three-bedroom home on the market at just over €330,000 sold quickly for over €325,000, or 2 per cent less than the asking price.
Finance was disclosed in 109, or 57 per cent, of the 192 cases. Of this, 109, a high proportion – 19 per cent- were cash buyers. Among those who had secured mortgages, 38.5 per cent were being funded by AIB; 12 per cent got mortgages through brokers; 10 per cent with Bank of Ireland; 7 per cent with the EBS; 6.5 per cent from the agent’s broker; 2 per cent from Permanent TSB; Halifax, Vision Financial Services, Bank of Scotland and Lombard Finance all supplied 1 per cent of mortgages each; and 1 per cent came under the shared ownership scheme.
Interestingly, in 6.5 per cent of the cases where finance was disclosed, the mortgages were given to people who worked in banks and financial institutions. This group secured discounts of up to 44 per cent on the original quoted price – or an average discount of 29 per cent. In 34 cases – 18 per cent of the 192 sales – an initial sale had fallen through with the eventual sale coming later, after further price drops. In at least six cases a sale had fallen through on more than one occasion.
Earlier this week the Irish Auctioneers Valuers Institute (IAVI) published a survey showing that house prices continued to drop in early 2009, by an average of 8.7 per cent nationwide in the first three months of the year. The survey, conducted among the IAVI’s 2,000 members, shows that the decline in Dublin was less – on average 5.6 per cent compared to 12 per cent in Munster and 8.5 per cent and 7.5 per cent in Leinster and Connaught respectively.
The house price data seen by The Irish Times bears this out, though it does show that the pace of sales accelerated in the first quarter of the year where the price was already seen to be fair, and a further discount could be negotiated.
In Dublin 8, a two-bedroom artisan cottage on the market at just over €350,000 quickly sold for around €300,000 while in Walkinstown, a typical three-bedroom terraced house was sold for €15,000 under its asking price of €300,000. Meanwhile a recently completed one-bedroom apartment in Sandyford was quickly sold for around €260,000 – about €5,000 below its asking price.
In Howth, a village cottage sold for just 6 per cent below its asking price. While the 192 sales do not make much of a dent in the large oversupply of homes in the market, the signs are that buyers are prepared to move where they perceive real value. The next step for the market will be to get transparency on prices.
With legislation currently being pushed through to activate the National Property Services Regulatory Authority, auctioneers can only hope that one of its first moves will be to demand that property prices to be recorded and put into the public domain.
Report by ORNA MULCAHY - Irish Times.