The latest real-estate industry report indicates that as vulture funds see greater potential in rural Ireland, the cost of two-bedroom flats is experiencing a boom. The Institute of Professional Auctioneers and Valuers (Ipav) residential property price monitor reveals that the price of flats in some regions has grown by over 10% just in the first half of the year.
These price hikes are particularly steep for two-bedroom flats in Westmeath, registering an increase of 14.4%, followed by Offaly (13%), Donegal (12.69%), and Kilkenny (12.3%).
From the third quarter of 2023, the prices of two-bedroom flats and three and four-bedroom houses have shown a steady rise, with the first half of 2024 witnessing a surge of over 5% compared to the prices in the latter part of 2023, and a growth of over 8% in the year till September.
Nationwide, flats have observed a higher rate of price rise compared to houses, Dublin being an exception.
Ipav’s CEO, Pat Davitt, noted the shifting interest of institutional and commercial investors towards areas beyond the Greater Dublin Area in pursuit of properties that offer market rents, rather than those with rent caps.
He stated that this trend is triggering more competition in the market, with the investing party usually emerging victorious in price wars, able to position these properties in the rental market. This situation is further evidenced by the most recent Daft.ie study. It adds yet another hurdle for first-time homebuyers trying to secure property.
As per Mr Davitt, the increased housing demand is driven by swift population growth–almost 100,000 in the year till April. Additionally, more non-Irish nationals are now buying homes in the nation.
However, due to the fear of being without a place to reside in, a lot of individuals hesitate to list their homes on the market. Furthermore, the scarcity of new houses led to 67% of first-time homebuyers in 2023 acquiring second-hand properties, and many others across Ireland buying flats as they are the most affordable option.
Mr Davitt praised the effectiveness of the Help-to-Buy and the First Home schemes but emphasized the urgent need for expanding it to include second-hand home purchases.
The property pundit, Donal Buckley, in the barometer report, added that the most robust house price growth is seen in areas where the property values are the lowest.
Values for flats in Donegal escalated by 12.69%, whilst rates for three and four-bedroom properties amplified by 10.16% and 11.6% respectively. It was observed that buyers who purchased a two-bedroom flat in either Tipperary or Longford in 2017 would have seen their investment double by now. Conversely, the same property in Dublin 4 would have seen a mere price augmentation of 34.7%.
Four markets in Dublin recorded the least growth in flat prices: in Dublin 2 and 18, figures escalated minimally by 2.33% to reach €440,000. In addition, South county Dublin, housing desirable locales like Dún Laoghaire and Killiney, witnessed a moderate increase of 2.5% in the rates for flats, bringing them up to €411,000.
Similarly, Dublin 15, home to the second most affordable flats in Dublin, also experienced a modest increment of 2.5%. The least expensive flats in the capital can be found in Dublin 24, incorporating places such as Firhouse, Tallaght, and Jobstown, where there was a rise of 5.37%, taking the tally to €261,667.