Property spend plunges €40bn...
Irish spend on property has crashed by 60pc in 2008 compared to last year, with expenditure down by a crushing 73pc -- or around €40bn -- since the market peaked in 2006.
Our property spend is forecast to fall to €15bn this year -- down from €45bn in 2007 and a heady €54.4bn in 2006, according to the latest 'Property Outlook' from Savills.
Joan Henry, head of Research at Savills Ireland says that all sectors of the property market have been affected -- most obviously the new homes area. The total spend on new homes is expected to fall from an estimated €23bn in 2007 to just €6bn this year.
Spend in the Irish investment market is expected to be down as much as 75pc from last year's €2bn.
Spend on domestic land is expected to fall by a staggering 80pc.
In the new homes as in the second hand market, prices have fallen by as much as 30pc this year and maybe more if looked at on an individual basis.
"Successive price reductions this year, coupled with the fact that the development of new homes has come to a virtual standstill, lead us to expect that supply and demand factors have pushed prices close to the bottom and that by mid-2009 prices will have stabilised," the Savills expert elaborates.
Commenting on the development land market, Ms Henry says that "the value of land has dropped by as much as 50pc depending on the location, with sites in secondary areas being the worst affected.
The value of properties on offer in the domestic investment market has also fallen, with considerable upward pressure on yields.
"Although investment transactions remain limited, it is widely accepted that prime yields should now have shifted out from their peak by up to 200 basis points," she comments.
Investments
"The yield gap between secure income producing investments and those with higher risk profiles has also widened considerably."
Tenant demand for offices has fallen significantly and rents have dropped. Take-up in 2008 is expected to be close to 180,000sqm which, although significantly below the 2007 level, is still a good rate.
"Looking to 2009 it is likely that the first half of the year will see similar low levels of activity to those experienced in the second half of 2008 with maybe a marginal improvement in the second half of the year," Savills predicts.
"It is likely to be into the second half of 2010 before any significant improvement in market activity is experienced and it is likely this improvement will be seen in the city centre first of all".
In the industrial market, the total take-up for the first six months of 2008 totalled almost 100,000sqm which was in fact higher than the corresponding period in 2007.
Traditionally, the second half of the year has witnessed higher levels of take-up, but the expected take-up for the second half of 2008 will be 100,000sqm at best as the industrial sector begins to feel the impact of a weak economy.
The vacancy rate at the end of July 2008 stood at approximately 444,500sqm up slightly from the 439,000sqm of vacant space recorded in January 2008.
The overall trend in the industrial market has reversed and is now for renting rather than buying.
Report by Con Power - Irish Independent Newspaper.
Irish spend on property has crashed by 60pc in 2008 compared to last year, with expenditure down by a crushing 73pc -- or around €40bn -- since the market peaked in 2006.
Our property spend is forecast to fall to €15bn this year -- down from €45bn in 2007 and a heady €54.4bn in 2006, according to the latest 'Property Outlook' from Savills.
Joan Henry, head of Research at Savills Ireland says that all sectors of the property market have been affected -- most obviously the new homes area. The total spend on new homes is expected to fall from an estimated €23bn in 2007 to just €6bn this year.
Spend in the Irish investment market is expected to be down as much as 75pc from last year's €2bn.
Spend on domestic land is expected to fall by a staggering 80pc.
In the new homes as in the second hand market, prices have fallen by as much as 30pc this year and maybe more if looked at on an individual basis.
"Successive price reductions this year, coupled with the fact that the development of new homes has come to a virtual standstill, lead us to expect that supply and demand factors have pushed prices close to the bottom and that by mid-2009 prices will have stabilised," the Savills expert elaborates.
Commenting on the development land market, Ms Henry says that "the value of land has dropped by as much as 50pc depending on the location, with sites in secondary areas being the worst affected.
The value of properties on offer in the domestic investment market has also fallen, with considerable upward pressure on yields.
"Although investment transactions remain limited, it is widely accepted that prime yields should now have shifted out from their peak by up to 200 basis points," she comments.
Investments
"The yield gap between secure income producing investments and those with higher risk profiles has also widened considerably."
Tenant demand for offices has fallen significantly and rents have dropped. Take-up in 2008 is expected to be close to 180,000sqm which, although significantly below the 2007 level, is still a good rate.
"Looking to 2009 it is likely that the first half of the year will see similar low levels of activity to those experienced in the second half of 2008 with maybe a marginal improvement in the second half of the year," Savills predicts.
"It is likely to be into the second half of 2010 before any significant improvement in market activity is experienced and it is likely this improvement will be seen in the city centre first of all".
In the industrial market, the total take-up for the first six months of 2008 totalled almost 100,000sqm which was in fact higher than the corresponding period in 2007.
Traditionally, the second half of the year has witnessed higher levels of take-up, but the expected take-up for the second half of 2008 will be 100,000sqm at best as the industrial sector begins to feel the impact of a weak economy.
The vacancy rate at the end of July 2008 stood at approximately 444,500sqm up slightly from the 439,000sqm of vacant space recorded in January 2008.
The overall trend in the industrial market has reversed and is now for renting rather than buying.
Report by Con Power - Irish Independent Newspaper.