A fresh new start to 2022 with restrictions lifted and hopefully a clear road ahead. So far in the early part of the year it would appear that demand is as strong now as it left off at the end of 2021.
Many buyers hoped that price growth would have started tapering off by now, but this does not seem to be the case with supply levels remaining well below average. House prices are up 14% annually according to CSO figures, although this has been being driven by sales in the low and middle ends of the market. In our experience, while the upper end of the market (€750k plus) is just as active, price growth has been more moderate, we estimate in the region of 5%. Either way, with the cost of finance being at its lowest rate ever and prices continuing to increase, buyers have started moving again to try to pin down a home.
At Colliers we see strong demand coming from buyers who are returning to Dublin from overseas with healthy deposits and cash balances in place. Enquiries are coming from the UK and Europe as well as Singapore, Hong Kong, South Africa and Australia. Colliers already have a worldwide network of offices, and recently linked with Luxury Portfolio and Leading Real Estate Companies of the World (LeadingRE) which allows us to extend our Irish listings to an even wider global audience. This means we are well connected with the increasing number of purchasers looking for their dream piece of the Emerald Isle.
Upsizing has been a key feature of the market, particularly following the lockdowns which prompted buyers with families to look for more space. The demand for coastal homes around Blackrock, Monkstown, Sandycove, Dalkey and Dun Laoghaire remains immensely strong, both from upsizers and from those looking to trade down from larger period family homes in Dublin 4 and Dublin 6. Stock levels in these areas are low with demand outstripping supply, demonstrated by our experience in the sale of a home on Montpelier Parade, Monkstown, which was sale agreed in just one day. There has also been a surge in demand outside of Dublin, again driven by a desire for more space and the potential to work from home longer-term.
Demand in suburban areas of Dublin 6, Dublin 14 and Dublin 16 is also strong with buyers attracted by the excellent choice of schools and local amenities such as leisure parks, golf clubs, mountain walks, shopping centres and good local transport. Many of the homes which transacted in these locations were probate sales requiring work, however this did not dampen demand with many being snapped up for figures well in excess asking – again due to low supply. Houses which came to the market already refurbished and extended exceeded the asking price by 10% to 15% and even 20% in some cases. Buyers are factoring in rising labour and material costs as well as the time involved in refurbishing a property on top of already busy lives.
Colliers’ Georgian collection of sales in Dublin 2 and Dublin 4, either refurbished or requiring work, such as the sale of homes on Leahy’s Terrace, Sandymount and Montpelier Parade, Monkstown attracted numerous local and international enquiries from people who in some instances were looking to purchase even though they were not returning home back to Dublin until late 2022 or early 2023.
A common theme of 2021 was that people who placed their homes on to the market went sale agreed quite quickly, but due to such low stock levels and consistently getting outbid on the homes they wanted to move to, had to in some instances take their property off the market as they themselves had nowhere to move. For this reason, we have found that those looking at trading down, now commonly called ‘rightsizing’, prefer to purchase or be sale agreed on another home before placing their main family residences on the market, leading to supply issues. We expect this may change throughout 2022 as the market stabilises and homeowners in these locations become more comfortable with putting their homes on the market.
Early signs for 2022 indicate strong activity in all price brackets, with competitive bidding causing asking prices to be exceeded in many cases. Stock levels should begin to increase as we move into the traditionally busier spring/summer selling period, supported by the removal of pandemic-related restrictions. There are other factors however, both internal and external, which will impact property markets this year. The Russian invasion of Ukraine has sent fuel and commodity prices soaring and most analysts expect global economic and financial markets to be negatively impacted. This will certainly have an impact buyer sentiment here in Ireland, although the full extent of this remains to be seen.
Demand is set to intensify in the coming years as the construction of new homes is still nowhere near required levels. New tech campuses for Facebook, LinkedIn, Salesforce and Tik-Tok will see more than 2.3 million square feet of office space added to the city with the potential for 13,000 additional workers. With Dublin’s residential market already very active and supply shortages acute, it will be up to developers to respond to this demand by providing more new build homes both in and outside of Dublin.