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ANNUAL RESIDENTIAL PROPERTY REVIEW & OUTLOOK 2020
CONTENTS
Foreword
5
The National Market
8
The Dublin Market
16
The Rest of Leinster Market
20
The Munster Market
24
The Connacht/Ulster Market
28
4 SCSI RESIDENTIAL PROPERTY REVIEW & OUTLOOK 2020
FOREWORD
UNIQUE INSIGHT
We are delighted to publish the 37th SCSI Annual should probably temper our expectations with may be taken to address this challenge
Residential Property Report. This Report is caution but what is clear is that agents expect including working with relevant stakeholders
informed by the professional opinion of over 460 greater clarity to lead to a renewal of consumer to ensure all essential documentation is
chartered auctioneers and estate agents across confidence and a return to a more stable market. compiled before a property goes to the market.
the country, bringing together their expert The report indicates that in the opinion of our While some uncertainty remains regarding the
insights and local knowledge to present a members, sellers have become more realistic on impact of Brexit, the outlook is generally positive
comprehensive overview of Ireland’s sales and price expectations over the past 12 months with for our national economic performance. We have
rental markets. Our questionnaire was completed many agents reporting that as prices have come commenced 2020 with much optimism and as an
during the month of December 2019. back in many locations, sellers have become organisation we will continue our advocacy
There has been a dramatic turnaround in the more amenable to market realities. While the activity to ensure that the expert views and
Irish residential property market over the past national Property Price Register provides some specialist knowledge of our members are
ten years. As we move into a new decade, the guidance, further supporting information to represented in the critical policy decisions that
findings of this Report indicate that whilst values contextualise the prices achieved would support must be made to ensure the housing needs of
have recovered over that time, the period of high the work of our chartered agents in assisting Ireland’s growing population are met now and into
price inflation appears to be drawing to a close sellers to understand their property’s value. the future.
– for now at least – and the market looks set for The results show that the rental market is still in I would like to thank our member agents for
a period of price stabilisation in the short to a period of flux. Further changes to regulations sharing their expertise and volunteering their
medium term. have resulted in many smaller investors leaving time to inform this important piece of research.
It is worth pointing out that given the nature of the investment market. Indications suggest
Ireland’s housing market – comprised as it is of that while the number of landlords exiting
multiple micro markets – there is significant has eased somewhat for every two landlords Johanna Gill MSCSI MRICS
variance in performance across the provinces leaving the sector, only one landlord is investing. President
and one of the strengths of this Report is that it Furthermore, there is a broader movement away
offers a unique insight into those localised from individual landlords towards institutional
housing markets. landlords developing larger portfolios of
Not surprisingly Brexit and the uncertainties properties. The impact of these factors must be
about the timing of the UK’s departure from the addressed, particularly in light of the continued
EU was one of the issues most cited by members. trend of limited rental supply.
What did surprise was the long shadow it cast For home sales our agents report that it takes
with agents describing 2019 as the year in which on average five and a half months to close a
uncertainty caused by Brexit played a greater role sale. These delays in conveyancing are less
than any other issue in shaping the residential than ideal and they impact both the sales and
property market. rental markets as properties are not coming
If everything goes according to plan 2020 should on stream for sale or rent as quickly as is
be the year Brexit is resolved and a new trading required at a time when housing supply is such
arrangement between the UK and the EU is a critical issue. We will be working with our
announced. Based on recent experience we committees to identify what practical steps
SCSI RESIDENTIAL PROPERTY REVIEW & OUTLOOK 2020
SCSI RESIDENTIAL PROPERTY REVIEW & OUTLOOK 2020 5
HIGHLIGHTS
SALES
INVESTOR
Most active seller type
Agents expect
30%
of activity
values to increase
2% in 2020
down from predictions of
4% for 2019
expect the
80%
OF AGENTS
demand for
houses to be
equal to or
5.5
MONTHS
higher than The average
supply time to sell a home
Dublin Munster
n Agents expect values to remain static in 2020. n Agents expect values to increase by 3% in 2020.
n 47% of agents report that sellers’ price expectations remained the n 40% of agents predict that the supply of housing to the market will be
same in 2019, with 27% reporting an increase. less than demand, with 38% predicting that it will equal demand.
n 40% of agents expect that supply of units will equal demand in 2020 – n 48% of agents report that sellers’ price expectations increased in 2019.
38% predict that it will be less than demand. n 40% report it remained the same.
n Most active seller type in 2019 – investor – represents 30% of activity. n Most active seller type in 2019 – those trading up – represents 30% of all sales.
Leinster Connacht/Ulster
n Agents expect values to increase by 1% in 2020. n Agents expect values to increase by 3% in 2020.
n 42% of agents report that sellers’ price expectations remained the n 52% of agents predict that the supply of housing in 2020 will be less than
same in 2019, with the same percentage reporting an increase. demand, with only 10% predicting that it will be greater than demand.
n 47% of agents predict that the supply of housing will equal demand in n 60% of agents report that sellers’ price expectations increased in
2020 – 28% suggest that supply will be less than demand. 2019, with 37% reporting that they remained the same.
n Most active seller type in 2019 – investor – represents 30% of activity. n Most active seller type in 2019 – investor – represents 32% of all sales.
6 SCSI RESIDENTIAL PROPERTY REVIEW & OUTLOOK 2020
HIGHLIGHTS
RENTAL
RENTS
58%
of agents experienced an
5% in 2020 increase
in tenant demand
2
for every
58%
investors
selling
of agents
experienced an increase
1investor in tenant demand
yet 47% reported
reduced instructions
is purchasing from landlords.
Dublin Munster
n Rents to increase by 4% in 2020. n Rents to increase by 5% in 2020.
n 49% of agents report a decrease in the number of landlord instructions n 54% of agents reported a decrease in landlord instructions in 2019 –
to rent their property in 2019 with 36% reported no change. 29% reported no change.
n 52% of agents reported that tenant demand has increased in 12 n 64% of agents reported an increase in tenant demand – 32% reported
months. no change.
Leinster Connacht/Ulster
n Rents to increase by 5% in 2020. n Rents to increase by 5% in 2020.
n 48% of agents reported a decrease in landlord instructions in 2019 – n 35% of agents reported decrease in landlord instructions in 2019 –
35% reported no change. 47% reported no change.
n 51% reported an increase in tenant demand in 2019 – 35% reported n 82% of agents reported an increase in tenant demand in 2019 – 0%
no change. reported an increase.
SCSI RESIDENTIAL PROPERTY REVIEW & OUTLOOK 2020 7
THE NATIONAL
MARKET
8 SCSI RESIDENTIAL PROPERTY REVIEW & OUTLOOK 2020
Sellers’ price expectations 2019 – agent views
Percentage of agents who felt that sellers’ expectations had:
100
80
60
40
20
“
0
National Dublin Rest of Munster Connacht/
Leinster Ulster
Increased Stayed the same Decreased
USUALLY, I CAN PREDICT
WHAT IS LIKELY TO
HAPPEN IN THE NEXT YEAR
2019 in context
AND GUIDE CLIENTS
This has fallen from the annual growth rate of
On a national level, property values increased by 9.6% in Q3 2018 and is the lowest increase seen
1.4% during the year to October 2019 (CSO
Property Price Index, November 2019). This is a
in Dublin since Q4 2017. On a quarterly basis,
the standardised average rent increased by €47
ACCORDINGLY.
remarkable slowdown given that CSO figures per month or 2.7% in comparison to Q2 2019.
WHEN TRANSACTIONS
revealed that values increased by some 7.2% Similar trends were seen in Cork, where the
between November 2017 and November 2018. standardised average rent for Cork City was ARE LOW, THIS IS MUCH
Excluding Dublin, values increased by 3.6% in the €1,192, up 1.4% year on year the lowest annual
year to November 2019. Values in the Border increase in Cork City since Q3 2015. While HARDER TO DO. IT HAS
BEEN DIFFICULT TO LOOK
region were some 9.9% higher in November 2019 affordability still remains an issue in Dublin,
than November 2018. It should be noted that the which represents about 40% of tenancies in
volume of transactions in some regions remains
very low and agents surveyed in this report
Ireland, the fall in growth rate in Dublin and Cork
is a sign that the pace of increase has fallen and
BEYOND BREXIT.
warned that until the volume of transactions may be stabilising in the areas which were
increases, it is likely that transaction data will be designated as Rent Pressure Zones the longest. The third quarter figures also show that:
difficult to contextualise. The number of planning permissions granted n one-off houses accounted for 30.7% of all new
In December 2019, the national average rent was for dwelling units in the third quarter of 2019 dwelling units granted planning permission in
€1,243 per month (Residential Tenancies Board, was 10,590, of which 5,656 were apartments and this quarter; and,
Q3 Rent Data – published December 2019) up by 4,934 were houses (Department of Housing, n the total number of planning permissions
about €94 from Q3 2018, and quarter-on-quarter Community & Local Government). Apartment granted for all developments was 7,739. This
rents grew nationally by 3.3% in Q3 2019. planning permissions granted have continued to compares with 7,440 in the third quarter of
In Dublin, the standardised average rent at the increase and are up 80.2% on the same period 2018, an increase of 4.0%.
end of Q3 was €1,762 per month, up from last year. An increase of 1.1% in houses There were very few price increases during the
€1,652 (€110) in the same quarter of 2018. This approved resulted in a total change for quarter, but there was a notable decrease in
represents a 6.6% annual increase in rent. dwellings of 32.1% for the current quarter. prices in Dublin and Leinster.
SCSI RESIDENTIAL PROPERTY REVIEW & OUTLOOK 2020 9
Profile of purchasers – national – as reported by agents in percentage terms
First-time buyer 44%
Trade up 24%
Trade down 16%
Investor 16%
“
IN A SLOW MARKET, A DEVELOPER WHO BUILDS
HOUSES CAN PHASE THEM; ONCE SOME HOUSES ARE
Nationally, 40% of agents reported that sellers’ SOLD, THEY MOVE ONTO DEVELOPING MORE. BUT
WITH APARTMENTS, THEY ALL NEED TO BE FINISHED
price expectations had increased during the year;
this is down from 80% in 2018 and 96% in 2017.
This points to price stabilisation in the market
place as a whole but there are regional variations
BEFORE THE FIRST CAN BE SOLD.
in this figure which is accounted for in the This was one of the top three reasons in all requisite deposit – had already been seen.
provincial chapters of this report. provinces. In interviews, agents noted that On whether the rules should have been changed
Many agents commented that vendor price because there has been such a low volume of in 2019, opinion was split. Many, especially in
expectations increased in Q3 and Q4 when there sales, potential sellers find it difficult to estimate Dublin and other urban areas, reported that the
was greater clarity about Brexit and the future the likely sale price of their property realistically. loan-to-income rule was holding back many
trading relationship between Ireland and the UK. This is especially true in rural areas where otherwise sensible transactions. Potential
Our agents warned that while increased seller sellers are overly influenced by national reports purchasers had already been paying rents which
expectations can be a good barometer of future of price increases which may not be realistic for in many cases would be higher than monthly
prices, unrealistic expectations are likely to have that locality. mortgage repayments.
a damaging impact on the market into the A number of respondents noted the limitations in “Banks have a degree of discretion when it comes
future. Unrealistic expectations merely lead to the national Property Price Register in helping to the lending rules. Unfortunately, the exemptions
disappointed sellers, reluctant purchasers and inform potential vendors. There is a dearth of are now being granted at the start of the year, so
protracted sales. useful contextual information available to sellers once the banks have exhausted the number of
“Usually, I can predict what is likely to happen in the which leads them to set unrealistic prices. It is mortgages they can give, the second half of the
next year and guide clients accordingly. clear listening to agents that more needs to be year can be much harder. It would be better if the
When transactions are low, this is much harder to do. done to help sellers understand what their home exemptions were available on a quarterly or half
It has been difficult to look beyond Brexit but once may be worth on the open market. year basis so that there was a better spread for
the UK gives some indication of what the plan is, and those wanting to buy in autumn.”
after an election here, I think it will be easier to see Mortgage lending Other agents were firm that the rules should
for a longer distance into 2020 and this will help Mortgage lending rules have now been in place for not have been changed, on the basis that while
everyone with their investment plans.” a number of years, and our agents believe that they caused difficulty for some potential
Agents, when asked to list the main reasons why they are now well understood by those looking to purchasers, a further change to the rules could
a property sale may fall through repeatedly cited transact. Any shocks to the housing market – such once again cause an upset to a market which was
sellers’ price expectation not being met. as delays in purchasing as tenants saved their slowly recovering.
10 SCSI RESIDENTIAL PROPERTY REVIEW & OUTLOOK 2020Profile of sellers – national – as reported by agents in percentage terms
Selling investment 28%
Trading up 26%
Trading down 18%
Receivership 13%
Executor 17%
Transaction time Agents noted that – traditionally – people, when dissatisfaction amongst landlords with the
On average, it takes five-and-a-half months for marrying or setting up their own home choose burden of regulation and the increased costs to
a transaction to be completed. This was the accommodation which would suit them until they landlords of compliance with new regulations.
case in all regions of Ireland. Agents remained have a family. At this point they move from a Longer notice periods and limits on annual
concerned about the continued existence of “starter home” to accommodation which would rental inflation meant that while one-third of
paper-based conveyances and noted that, suit a growing family. In 2019, this did not sellers in 2019 were selling investment property,
where conveyances are complicated by issues happen; instead, more and more people raised only 15% of investor purchasers were buying
such as executor sales, reliance on paper- families in apartments or small homes. property with the intention of renting it.
based conveyances slow down transactions. To remedy this, and to help people move to more This reflects a broader movement within the
“An executor sale can be a nightmare. Even the suitable accommodation, housing which would private rented sector away from individual
most routine transaction can be held up because suit families’ needs must come onto the market. landlords with a small portfolio of rented houses
of legal paperwork and it is difficult for purchasers Respondents noted that very few people (around towards institutional landlords who are buying
who have got all of their paperwork together to be 16% of vendors) are trading down. This is lower and developing their own portfolios to rent.
told that there is a delay and they’re going to have than expected. It means that people are perhaps Many agents in rural parts of Ireland noted that
to stay in their rented accommodation longer.” living in accommodation which is surplus to their properties which had been rented were being
needs. Respondents noted that in 2020, more purchased by young people from central and
Profile of purchasers should be done by government to encourage eastern Europe who had practical skills in home
In terms of the profile of purchasers, almost one people to move down, into smaller homes. renovation, and were refurbishing the homes
half of purchasers were first-time buyers. themselves. In some cases, the purchasers were
There was very little regional spread on this Profile of sellers actually those who had been renting the
issue. Around one quarter of purchasers were With regard to the reasons for selling a property, accommodation and had bought the property
seeking to trade up. Many respondents noted the largest cohort was those selling an from their landlord.
that they would have expected to see a larger investment property (roughly one-third of all “In most cases, the rent doesn’t cover the
number of trader-up purchasers, but a sellers). Many landlords sold investment landlords’ mortgage and costs, and the cost of
continued shortage of suitable accommodation property in 2019 as a result of increased market maintenance continues to rise. When a tenant
as well as uncertainty about their economic value meaning the property was now out of hands in their notice, I see landlords using this to
futures meant that many people continued to live negative equity, or because a tenant had left the leave the investment sector, especially if the
in accommodation beyond the point where, in a property and it was an opportune moment to property is out of negative equity and there’s a
normal market, they would have moved. sell. Agents reported that there is a general demand for it on the open sales market.”
SCSI RESIDENTIAL PROPERTY REVIEW & OUTLOOK 2020 11“
PEOPLE ARE LIVING
HEALTHILY FOR LONGER.
THEY’RE LIVING HAPPILY IN
Apartments and a new urban demographic profile amongst BIG HOUSES FOR LONGER
Across Ireland, the volume of new apartments
into the residential market continued to rise, albeit
people who have moved to Ireland temporarily
with their work.
AND THESE ARE NOT BEING
well below levels of demand. It is likely In 2019, there was a clear mismatch in the
PASSED ON TO THE NEXT
that in Cork and Dublin, apartments will continue private rented sector between demand for
to come onto the market in 2020, based on accommodation by tenants and instructions from GENERATION. PEOPLE
planning permission data from 2019. Apartment landlords. Nationally, 58% of agents had
developments provide significant logistical experienced an increase in tenant demand, ARE RAISING FAMILIES
IN THE APARTMENT THEY
difficulties in a slow market as all of the scheme and yet 47% reported reduced instructions from
needs to be developed before individual landlords. This reflects longer rental periods
apartments can be rented or sold. It is likely
therefore that this new supply will take place in
driven possibly by new regulations surrounding
notice periods. The strongest tenant demand was
DIDN’T EXPECT TO LIVE
areas of Dublin and Cork especially targeted in Connacht/Ulster (63.4% of agents reported IN, AND THEY CAN’T
predominately at the long-term rental market and increased tenant demand) and Munster (82.4%
not necessarily for the sale market. reported an increase) and reflects a hugely FIND THE HOUSE THEY
“In a slow market, a developer who builds houses increased appetite for rental accommodation in
can phase them; once some houses are sold, they some rural areas. In those areas, only around 12% NEED BECAUSE IT’S
move onto developing more. But with apartments,
they all need to be finished before the first can be
of agents reported any increase in instructions
from landlords.
NOT AVAILABLE.
sold. Developers don’t have the resources to do “The Capital Gains Tax exemption is having an impact
that, but if the availability of financing improves, on landlords leaving. They don’t see prices perspective of visibility, nationwide limits to rental
I think we will start to see some of this happen for increasing, and having an investment property was increases permitted improved visibility for both
the sales market in 2020.” only going to be a medium-term plan, so they are landlords and tenants about the rent which would
getting out now. Few are thinking of getting into change hands each month. Nonetheless, many
The rental market in 2019 investment properties so there are not many new landlords remain fearful about the future direction
As with 2018, the greatest turmoil to the property landlords to replace them.” of policy in this area, with limits to mortgage
sector was in the rented sector, with rents rising The issue of limits to rental increases continued to interest relief for landlords being one of the main
faster than both property prices and underlying affect the market in 2019. However, a large number reasons why a landlord may have chosen 2019 to
national inflation. No agent who completed the of agents who were interviewed noted that this had leave the rented sector.
questionnaire or who was interviewed for this a less profound impact on the overall market than Nationwide, there was a greater choice of housing
report expects rents to fall in 2020. Nationally expected. The main impact of rent caps was on the on the open market to buy rather than to rent. In
agents expect rents to increase between 4% and attitude of landlords who, at the end of a tenancy, 2019, a shortage of rental accommodation
5% in 2020, driven by increased demand, made the decision to leave the rented sector rather encouraged many people, who could afford to, to
especially by those who are saving for a deposit, than commence a new tenancy. Indeed, from the buy their first home rather than continue to rent.
12 SCSI RESIDENTIAL PROPERTY REVIEW & OUTLOOK 2020Supply of new housing in 2020 – agents’ views. Property values in 2020 – agents’ views
Percentage of agents who think that supply of Percentage of agents who think that property values
new housing in 2020 will be: will change as follows in 2020:
100 100
80 80
60 60
40 40
20 20
0 0
Apartment Terrace Semi‐ Detached Apartment Terrace Semi‐ Detached
house detached house house detached house
house house
Greater than Equal to Less than Change in values +5 0 ‐5
demand demand demand
Outlook for 2020 demand. When asked what type of property a large number believing that values would
The main issue in 2020, as reported by our they would most like to see come onto the continue to flat-line over the course of 2020.
agents, will be the imbalance between the market in 2020, a large number of our When asked what issues would have an impact
supply and demand for property. In 2019, members cited the need for smaller family on transaction prices in 2020, a number of
a large number of agents reported a shortage homes to which owners could move having agents surveyed were more optimistic about
in smaller family homes (listed here as terrace begun a family while living in apartments. The 2020 than this data would suggest. The recent
houses) to which purchasers could move from market for “top end” of the market (i.e., larger UK general election had restored some
“
apartments once they had begun a family. family homes) has been very slow in 2019, with predictability to UK politics and many felt
In 2020, there will be a greater demand for all a better match between supply and demand. that a clear timetable for Brexit would
property types than availability; rather than “There will be no price help the property
having a major impact on prices, a number of
agents stated that the shortage will simply
inflation in 2020, and
that’s no bad thing.
THERE WILL BE NO PRICE market recover to see
increased transactions
mean people continue to live in their current Peaks and troughs
INFLATION IN 2020, in the year ahead.
homes for longer. The normal “churn” in the confuse people and Agents on the Border
market is not likely to take place, and in 2020 they hold off making a AND THAT’S NO BAD reported that currency
the volume of transactions will remain low, as decision. Cash buyers fluctuations have long
in 2019. As noted in the table, while some 46% will continue to beat THING. PEAKS AND had a profound impact
of agents believe that there will be an
equilibrium between supply and demand for
mortgage-holders so
we will see increases
TROUGHS CONFUSE on investment appetite
in the Republic, and it
apartments, a large number see further
property shortages across all property types.
in activity but there’s
not the competition
PEOPLE AND THEY HOLD was hoped that some
clarity around Brexit
There is likely to be no significant change in between buyers like in OFF MAKING A DECISION. would reduce these
property values across all property types. the past – the mortgage fluctuations.
There were some regional variations which will rules prevent that – so I hope to see more Nonetheless, it is not yet clear what sort of
be discussed later in this report, but it is instructions and transactions without the huge physical barrier or border will emerge on the
notable that the greatest increases in values peaks in prices which we’ve seen in the past.” island of Ireland, and until such point that
will be in terraced houses. Interviewees noted When asked to forecast property values in 2020, clarity is reached, many agents working in
that these smaller family homes have not been opinion was split. The bulk of agents saw values Border regions remain uncertain about the
supplied in the quantities needed to maintain move by no more than 5% in either direction with level of demand for housing in the regions.
SCSI RESIDENTIAL PROPERTY REVIEW & OUTLOOK 2020 13Supply of property to rent in 2020 – agents’ views Forecast changes in rent in 2020 – agents’ views
Percentage of agents reporting that supply of Percentage of agents who think that rent will change as
property to rent in 2020 will be: follows in 2020:
100 100
80 80
60 60
40 40
20 20
0 0
Apartment Terrace Semi‐ Detached Apartment Terrace Sem‐ Detached
house detached house house detached house
house house
Greater than Equal to Less than +5 +4 0
demand demand demand
“
The rental sector in 2020
In 2020, the greatest mismatch between
supply and demand for housing will be in the
private rented sector. Across all property types IN 2020, THE GREATEST MISMATCH
there is a large and growing need for new
accommodation. This is the result of two issues: BETWEEN SUPPLY AND DEMAND FOR
HOUSING WILL BE IN THE PRIVATE RENTED
first, the increasing cohort of tenants, driven by
both demographic changes and a continued
influx of young workers from countries where
long-term renting is the norm. During a period
SECTOR. ACROSS ALL ROPERTY TYPES
of uncertainty, and with difficulties securing a THERE IS A LARGE AND GROWING NEED
mortgage without substantial savings, people
are renting for longer than in the past. FOR NEW ACCOMMODATION.
The second issue driving the requirement for
further accommodation to rent is the continued student accommodation which is too small for the the survey and many who were interviewed
exodus of smaller, private landlords who are big investors and too risky for individuals but ideal expected rents to increase in 2020.
selling their investment properties. for a small group to fill that gap.” In urban areas, the private rented sector is
Many agents are concerned that the rental It was notable that many agents were where a significant part of new completion
sector is now almost completely reliant on concerned that the institutional landlords tend activity is taking place. In urban areas, purpose-
larger, institutional landlords who are only to supply apartments in urban areas, while built student accommodation and co-working
developing large-scale private rented the landlords leaving the market were renting schemes for people living in Ireland on a short-
developments. In urban areas, these have only out houses in rural areas. Agents warned that term basis because of work have taken some of
come onto the market relatively recently, and it would be unlikely in 2020 that there would be the pressure off the private rented sector, and
there is a clear demand for large volumes of new increased investment in rented property agents expect more such projects to come onto
rented accommodation throughout 2020. outside urban areas to make up for the reduced the market in 2020. This is likely to have an
“I hope we see some co-operatives start work in availability of rented houses in rural parts of impact on rents, but the introduction of rent
2020. Perhaps five or ten people pooling their the country. freezes in many parts of the country, and further
resources and investing in a small development Agents noted that it was difficult to accurately mooted reforms to this sector may continue to
using their savings. There’s a demand for some predict rents for 2020. All agents who completed artificially limit the growth in rents in 2020.
14 SCSI RESIDENTIAL PROPERTY REVIEW & OUTLOOK 2020“
DEVELOPERS ARE NOT
FOLLOWING THROUGH ON
PLANS WHEN THEY ARE
Issues facing the residential sector in 2020 property developers, many prefer to develop
Agents looked to two issues in 2020 to determine apartment complexes rather than housing FAST TRACKED. I THINK
THAT THIS IS BECAUSE
how the residential property market would developments. Thus, ironically, it will be the
perform. First, clarity on Brexit. It was noted continued exodus of private landlords who will
repeatedly across interviews that Brexit had
undermined the confidence of many potential
supply second-hand homes into the market.
While this may ease the pent-up demand for the
DEVELOPERS ARE FINDING
homeowners and landlords. With rental increases purchase of homes, it merely exacerbates the
IT DIFFICULT TO GET
limited by legislation, and a requirement for a on-going crisis in the private rented sector.
large deposit before buying a house, many “Put simply, people are living healthily for longer. FINANCE AND ARE
potential homeowners were satisfied to continue They’re living happily in big houses for longer and
to live in their current accommodation for another these are not being passed on to the next generation. UNCERTAIN IF PROJECTS
WILL BE FINANCIALLY
year, secure in the knowledge that their rent People are raising families in the apartment they
would not significantly increase and their deposit didn’t expect to live in, and they can’t find the houses
was being accumulated. This led to low levels of
transactions especially in the second half of 2019.
they need because it’s not available.”
The “fast-track” planning system for large-scale
VIABLE.
Likewise, investors were reluctant to undertake housing developments has had limited results.
any significant investment decision until This is partially due to the limits on the scheme
there was clarity about the timing of Brexit. which is available for only the largest housing
Those landlords who had the opportunity to sell developments. It is also due to the nature of the
their investment property and who were worried scheme itself which requires developers and
about the future direction of regulation of the planners to supply a greater volume of
private rented sector, instructed agents to sell information to An Bord Pleanála at the beginning
their portfolio. of the project and allows for increased public
Following the UK general election in December consultation at this stage – the intention is that,
2019, a number of agents expected the volume of once the project has been submitted for
instructions and enquiries to pick up in the first approval, there is greater clarity on the delivery
half of 2020 when this pent-up demand was of the project. Many agents remain sceptical
unleashed. It was noted by some respondents that about the impact that this will have on the
a general election in Ireland will also give some delivery of new housing in 2020.
clarity about Government policy towards the “The Strategic housing delivery process has been
housing sector which will likewise assist those positive to accelerate the delivery of future
looking to move home in 2020. development lands. Cost inflation however has
The second main issue which will affect the sector meant that some developments are slow to
in 2020 is the availability of property. Many agents, commence and viability is a challenge. The new
especially in urban areas noted the shortage of SHD rules will force developers to use or lose these
smaller family homes. While planning permission permissions, which I view as a positive.”
data for apartments suggests there will be “Developers are not following through on plans
improved supply in 2020, this is not the case for when they are fast tracked. I think that this is
housing developments, where supply is likely to be because developers are finding it difficult to get
very limited. Agents noted that while there has finance and are uncertain if projects will be
been an increase in the availability of finance for financially viable.”
SCSI RESIDENTIAL PROPERTY REVIEW & OUTLOOK 2020 15THE DUBLIN
MARKET
From left to right –
Park Lodge, Booterstown Avenue, was quoting €2,750,000.
Annamore, Sydney Avenue, Blackrock, was quoting €2,750,000.
3 Vesey Place, Monkstown, was quoting €2,250,000,
3 Clifton Terrace, Monkstown, was quoting €2,400,000.
“In all cases within 5% of the asking price was achieved and all the
buyers were Irish based. In previous years, most top-end buyers would
have been overseas or returning ex-pats.”
16 SCSI RESIDENTIAL PROPERTY REVIEW & OUTLOOK 2020Relationship between supply and demand for Property sales prices Q3 – National Sellers’ expectations of
property for purchase – agents’ views. and Dublin – agents’ views. property prices – agents’ views
Percentage of agents who felt supply was: Percentage of agents reporting Percentage of agents reporting
that property prices had: that sellers’ expectations had:
100 100 100
80 80 80
60 60 60
40 40 40
20 20 20
0 0 0
Apartment Terrace Sem‐ Detached National Dublin National Dublin
house detached house
house Increased Increased
Stayed the same Stayed the same
Equal to Less than Greater than
demand demand demand Decreased Decreased
Residential sales 2019 a mad scramble like in the past – that’s the limited. There is a continuous flow of new
The Dublin residential property market was the mortgage rules keeping a ceiling on things. households being formed but people are living
most suppressed of all the regional markets People don’t want to stretch themselves and longer and not trading down and so we see
examined in this report; both the volume of the lending rules mean they can’t even if they people living in entry-level housing for longer.”
enquiries and transactions remained very low, wanted to.” A number of agents noted that in 2018, a large
especially amongst those wishing to trade up. On average, 40% of agents predict that the number of instructions they had received were
There was a limited supply of new housing supply of residential units in 2020 will equal due to distressed sales. However, by the end of
coming onto the market which impeded demand. Similarly, 38% predict it will be less 2019, most of these sales had been worked
transactional activity, and while future trends than demand in the next 12 months. through and there were fewer instructions from
for new supply of apartments in the city are “There has been an immediate shift by landlords to banks. During that period, houses were being
positive, there remains a dearth of new houses sell their investment properties. Otherwise they are sold by banks at discounted prices which
for those who wish to move into larger houses subsidising their tenants where the rent is capped. affected the overall market, but this had been
from apartments. "Generous landlords" who kept the rents low to keep worked through. Therefore, the second half of
Agents reported that vendor expectations were good tenants are now being forced to sell (also by 2019 saw something of a hiatus in the property
“reasonable” in 2019 with a larger cohort of banks who increasingly want capital and interest market. The bulk of transactions took place in
buyers and sellers using information from the instead of old arrangement of interest only) thus the first half of the year when banks used the
property price database and recent sale necessitating the tenants having to find alternative exemptions to mortgage lending rules, and there
reports to make more informed decisions accommodation, often emergency accommodation, were still a number of distressed properties
about realistic transaction prices. The volume increasing homeless figures.” coming onto the market. During the second half
of transactions remained low but the Dublin In interviews with agents working in the region, of the year, the expected supply of new property
market was more active in 2019 than in 2018 many reported that any price increases seen in had not materialised, and concerns about
which benefitted both parties as it allowed Dublin in 2019 had taken place at the start of Brexit and the future direction of the economy
more price comparisons and informed the year, with very limited activity in quarters undermined consumer confidence.
decision-making. three or four of 2019. The Central Bank rules regarding mortgage
“There was much less competition in 2019 than “The Dublin market was flat; it was better than this lending continued to be most severely felt in
previous years. Now we might get two or three time last year and people tend to be more realistic Dublin, where prices are currently highest and
people bidding on a house and once it goes past about prices which is good. Starter homes are most where the requirement to raise a substantial
their ceiling price, a party will pull out. There’s not sought after but this is where the supply is most deposit are most onerous.
SCSI RESIDENTIAL PROPERTY REVIEW & OUTLOOK 2020 17Percentage of agents’ reporting Profile of purchasers in 2019 – Profile of sellers in 2019 – as
that tenant demand and as reported by agents in reported by agents in
landlord instruction in 2019 percentage terms percentage terms
was:
100 100 100
80 80 80
60 60 60
40 40 40
20 20 20
0 0 0
Tenant Landlord National Dublin National Dublin
demand instruction
Down First time buyer Trade‐down Selling Receivership
investment
Same Trade‐up Investor Trade‐up Executor
Up Trade‐down
“People in Dublin are in a double bind. Rents are received an increased volume of instructions have an impact on Ireland’s competitiveness.
high which means it takes longer to get the from landlords. Indeed, around half of Dublin We need the new supply to be available to take the
deposit together. People can afford the agents experienced reduced instructions from heat out of salaries…But these people have very
mortgage – after all, it’s often the same amount landlords during the same period. high demands for where they will live. They want
as a monthly rent – but it is taking a long time to Agents noted that investors had been the to live close to work and they want first-class
get the deposit together, and if they can afford first to be hit with the downturn in prices facilities. We don’t have that yet in Dublin – people
to wait and see if prices fall further, they are during the recession and that the cost of are commuting.”
doing so.” regulation had continued to increase in the The profile of buyers in Dublin was roughly in
Some agents in Dublin noted that a significant intervening period. In Dublin, where prices had line with the profile seen nationwide, with
amount of their activity in 2018 was from Irish risen earlier than in other regions, investors around 50% of buyers being first-time buyers.
people returning to live in Ireland after a who were looking to leave the property market There were fewer investors into the Dublin
number of years in the UK. had already done so. housing market in 2019 compared to the
Recent increases in stamp duty in the UK, and During 2019, there was continued demand national profile.
uncertainty about their entitlement to continue for accommodation from tenants especially In Dublin, as in the rest of Ireland, one
to live and work in the UK following Brexit for apartments. third of vendors were investors who were
made investment in a home in Dublin a Agents working in the region noted that selling investment property.
sensible option. However, this supply of new as employment in the city increased, it was Reasons for doing so were split. A number
purchasers largely dried up in 2019, and many driven by a continued influx of workers from of agents reported that investors had
of the international cash-buyers had either overseas who were looking for accommodation always anticipated keeping an existing
made a purchase or had decided to hold off on when they arrived here. Agents reported home once they moved house and renting
doing so until there was greater clarity about increased enquiries from employers who it out until prices had recovered until it was
Brexit and prices. wanted to ascertain the likely cost of living for expedient to sell it.
their employees before making expansion Other agents noted that there was a continued
Rented sector decisions. exodus of smaller landlords throughout 2019,
The greatest mismatch occurred in the “The problem for employers is that their workers as the burden of regulation increased, and the
private rented sector. Over half of Dublin are demanding significant salaries before introduction of rental caps meant they would
agents experienced increased demand for they’ll move to Dublin because they know be unlikely to get an improved return on
accommodation from tenants, but only 13% accommodation is so expensive. This is going to investment in 2020.
18 SCSI RESIDENTIAL PROPERTY REVIEW & OUTLOOK 2020Predicted changes to rents – percentage of agents predicting
that rents will change in 2020
Apartment Terrace Semi-detached Detached
house house house
+5 19 18 19 16
Relationship between supply and demand for rental
+4 33 36 37 33
properties – agents’ views.
0 12 18 15 19
Percentage of agents predicting that supply will be:
Expected changes to property prices – agents’ views. Percentage of 100
agents predicting that property prices will change in 2020 80
Change Apartment Terrace Semi- Detached
60
house detached house
house 40
National +5 19 22 18 19
20
0 29 23 25 26
-5 10 10 8 10 0
Apartment Terrace Sem‐ Detached
Dublin +5 15 21 18 17 house detached house
house
0 30 26 25 30
-5 12 7 8 12 Greater than Less than Equal
demand demand to demand
“
2020 whether we get more landlords selling up Landlords who cannot get a market rent because
PEOPLE IN DUBLIN ARE IN terrace houses or semi-detached and they come of the restrictions are selling, reducing the supply
into the owner occupied market.” of rented property and this puts upwards
A DOUBLE BIND. RENTS ARE Household formation and demographic changes pressure on rents.”
HIGH WHICH MEANS IT
are likely to continue the demand for housing in No agent surveyed for this report expects rents
the capital. In 2020, a number of agents expect to fall in Dublin in 2020. A number stated that
TAKES LONGER TO GET THE employment growth to occur from people
moving to Dublin from overseas to work in
they expect to see some apartment types
increasing rents by 10% but these are likely to be
DEPOSIT TOGETHER. technology, hospitality or professional services individual niche, high-end apartments, but in
firms. These people, as well as growing general, across all property types, it is likely that
IF THEY CAN AFFORD TO existing families, will require housing which is rents will increase by the limits permitted by law.
not yet available. “People are staying in their rented homes longer,
WAIT AND SEE IF PRICES protected by longer notice periods and lower
FALL FURTHER, THEY ARE. Rents
In 2020, rents in Dublin are expected to increase
rent inflation. Now, even at the end of a tenancy,
rents can’t be varied by more than 4% so it is
faster than sale prices, reflecting the pattern having an impact on helping people who are in
Outlook for 2020 seen in 2019. It was notable that while many situ. It is not helping those looking because
Agents were clear that the reduction in prices agents expected rents to increase by 4% in 2020, there’s very little for them.”
seen in 2019 would have a positive effect on a significant number expect rents to rise faster There is clearly still an imbalance between
moderating vendor price expectations in 2020; than the currently permitted increases. This can supply and demand for housing to rent in Dublin.
vendor expectations not being met was a cause be explained by the new supply of rented This is most acute for apartments but across all
of a large number of transactions falling through accommodation coming onto the market which property types, demand is likely to continue to
in 2019, and into 2020 it was likely that flatlining is not subject to the same limits as existing outstrip supply. While the rent restrictions limit
prices would help potential purchasers make the rented accommodation. the impact that this imbalance will have on rents,
decision to buy. “Landlords who we work for would not increase a number of agents noted that it is the inevitable
“People want to move from apartments into decent rents while a tenant remained in occupation as it consequence of landlords leaving the market,
sized houses, and this is what investors have been made sense to keep a good tenant happy. If they and the limited supply of new properties from
buying to lease out. So we need to wait and see in do that now they are penalising themselves. institutional build-to-let landlords.
SCSI RESIDENTIAL PROPERTY REVIEW & OUTLOOK 2020 19THE REST OF
LEINSTER MARKET
Maple Lodge, Killeens, Wexford.
Asking price €265,000. Sold for €255,000.
20 SCSI RESIDENTIAL PROPERTY REVIEW & OUTLOOK 2020Property sales prices Q3 – Rest of Leinster Sellers’ expectations of property prices –
– agents’ views. Percentage of agents agents’ views. Percentage of agents
reporting that property prices had: reporting that sellers’ expectations had:
100 100
80 80
60 60
40 40
“
20 20
0 0
National Leinster National Leinster
Increased Stayed the same Increased Stayed the same WE SEE PEOPLE BUYING
Decreased Decreased THEIR FIRST HOME WITH
Relationship between supply and demand for property to purchase in 2020 – agents’ views. AN EYE ON THE FUTURE.
Percentage of agents reporting that supply in 2020 will be:
Apartment Terrace Semi- Detached
THEY ARE BUYING HERE
house detached house
house BECAUSE THEIR MONEY
National Greater than Demand 17 17 21 27
Equal to Demand
Less than Demand
46
38
45
38
39
40
38
36
GETS THEM A LOT MORE
Leinster Greater than Demand
Equal to Demand
19
52
21
50
26
44
33
43
HOUSE – AND IT’S FLEXIBLE
Less than Demand 29 29 31 24
FOR RAISING A FAMILY.
The market in 2019 employment opportunities across Leinster. summer onwards, and this year it was much
According to one agent surveyed for this report, As a result, the population of the region has worse because of the media commentary about
for the purposes of analysing the Irish property increased, and so too has demand for property. Brexit. The sales which took place at the start of
market, it is now opportune to refer to Leinster “From a practical perspective, Leinster is a much the year had been progressing since 2018,
as the Greater Dublin Commuting Zone. more attractive option for those who aren’t likely but there was nothing new happening since
A shortage of new homes and apartments in to see their salary increase in the near future, but Brexit became real in the late summer.”
the city of Dublin, and improvements to are tied to working in Dublin. There are a lot more On average, 47% of our agents in Leinster
transport infrastructure to the capital, have employment opportunities here too, so there is a reported that supply of housing available to
enticed an ever-larger cohort of people from lot of demand for decent housing on some land.” purchase will equal demand in 2020.
the city to buy property in the surrounding In terms of sale prices in the third quarter, agents Those that reported that supply will be less or
counties. Commuting distances which once reported that prices in the province had either greater than demand was split.
would have been insurmountable are now used flatlined or decreased. When asked to explain why In terms of the profile of purchasers in
on a regular basis by those who cannot afford this was, agents reported a reduction in sales Leinster, there is a notable absence of
or find properties within the city, or who want during the second half of the year. investors and those trading up. According to
to live in a less dense environment. “Traditionally, there was a spring and autumn one agent who was interviewed, the property
Further, this growth in physical infrastructure buying season. This changed a few years ago market remained relatively static, and once
and a lack of suitable office accommodation because of the Budget changing to October. settled into their new home, people are living
within Dublin has led to the growth in Now, there is very little happening from the there longer than might previously be the case.
VSCSI RESIDENTIAL PROPERTY REVIEW & OUTLOOK 2020 21Profile of purchasers in 2019 – Profile of sellers in 2019 –
as reported by agents. as reported by agents.
100 100
80 80
60 60
40 40
20 20
0 0
National Leinster National Leinster
First time buyer Trade‐down Selling Receivership
investment
Trade‐up Investor Trade‐up Executor
Trade‐down
Expected changes to property prices – agents’ views. Percentage of agents
that predict the following changes in property prices in 2020:
Change Apartment Terrace Semi- Detached
house detached house
house
National +5 19 22 18 19
0 29 24 25 26
-5 10 10 8 10
Leinster +5 16 18 19 12
0 31 18 18 25
-5 13 21 11 13
“We see people buying their first home with coast or other tourism areas. Irish people living “Public transport is getting better in Leinster, and
an eye on the future. They are buying here in the UK are selling their second homes to buy there are a lot of new high-tech jobs growing up
because their money gets them a lot more a home to live in, and we are not seeing a on the east coast which is attracting younger
house – and it’s flexible for raising a family. return to holiday homes which would be the people who want to rent here. They can’t yet
We don’t see much in the way of investors, but staple of the market in our area.” afford housing in areas where they would like, but
there does seem to be a movement towards Opinion was split between whether prices would it is a growing trend all along Leinster.”
people downsizing here.” increase or decrease in 2020, with a number of The pattern of tenant demand and landlord
agents interviewed for this report stating that instructions were similar in Leinster as the
Outlook for 2020 this figure would be heavily influenced by the rest of Ireland in 2019. There was a large and
For apartments, price expectation of agents profile of sales in the year ahead. Particularly growing demand for accommodation from
working in Leinster was roughly in line with the during the first half of 2020 when the banks are prospective tenants, yet instructions from
national forecasts. Many more expect to see using their discretion with regard to mortgage landlords continued to fall. As with the other
decreases in house prices in 2020. When asked lending, it is likely that there will be an increase regions of Ireland, this points to an absence
why this might be, one agent noted: “the upper in prices which will not be sustained during the of new supply to meet existing demand, and
end of the market is fairly saturated. We are not year. Again, no agent expected to see rents fall continued reduction (or at least relative
seeing any appetite for second homes on the in 2020. reduction) in available rental accommodation.
22 SCSI RESIDENTIAL PROPERTY REVIEW & OUTLOOK 2020“
Issues facing the market in 2020
Many of the issues facing the property
market in Leinster are the same as those
affecting the Irish property sector as a whole. THE TOP END OF THE MARKET IS STILL
Uncertainty about Brexit is likely to have an
impact on activity in the east coast outside of
DOING WELL, BUT THERE AREN’T THE
Dublin because of its impact on investment into
the capital.
PROPERTIES AVAILABLE. DEVELOPERS
Agents working in Leinster noted that the AREN’T BUILDING HOUSES FOR PEOPLE
market there will undoubtedly be affected by
the availability of housing in the capital and its TO TRADE TO, SO THERE IS NOWHERE
FOR PEOPLE TO DOWNSIZE TO.
impact on prices and rents there. It is likely that
the supply of property in Leinster will not be
sufficient to meet demand to a more acute
degree than nationwide, and there is a clear Expected changes to rents – agents’ views. Percentage of agents predicting
preference amongst some purchasers towards the following changes in rent in 2020:
new, more energy-efficient homes. Apartment Terrace Semi- Detached
house detached house
“I work in the north Wicklow area and the house
second-hand market is hugely affected at the National +5 24 27 26 25
moment with the amount of new developments +4 23 25 24 22
0 12 16 14 17
being built in the area and it is becoming
Leinster +5 16 19 19 29
increasingly difficult to sell the second-
+4 10 10 13 10
hand houses.” 0 23 23 16 19
It was noted that Government policy towards
activating sites within the capital to curb Percentage of agents reporting that tenant demand and landlord instruction in
2019 moved as follows:
urban sprawl will have an impact on the
Tenant demand Landlord instruction
volume of activity in Leinster. With the
market dominated by commuters from the National Down 9 44
Same 33 33
capital, as well as second homes and holiday
Up 58 23
homes owned by UK-based Irish citizens, it is Leinster Down 13 48
likely that Brexit will have an impact on Same 36 36
investment appetite and the profile of buyers in Up 51 16
the region.
Relationship between supply and demand for property to purchase – agents’ views.
“The top end of the market is still doing well, but Percentage of agents reporting that supply in 2020 will be:
there aren’t the properties available. Developers Apartment Terrace Semi- Detached
house detached house
aren’t building houses for people to trade to,
house
so there is nowhere for people to downsize to.
National Greater than Demand 12 11 11 15
So, I would like to see more of the higher end Equal to Demand 13 15 16 22
houses come available in 2020 and this would Less than Demand 75 74 73 63
get people moving again. But it’s all linked to the Leinster Greater than Demand 10 10 10 10
Equal to Demand 10 16 13 26
economy, attitudes and if there are units where
Less than Demand 80 74 77 64
people want to live.”
SCSI RESIDENTIAL PROPERTY REVIEW & OUTLOOK 2020 23THE MUNSTER
MARKET
THE PROPERTY MARKET IN 2019
Four bed “surfers’ paradise” in Kerry. Sold in
October 2019 for €510,000
24 SCSI RESIDENTIAL PROPERTY REVIEW & OUTLOOK 2020Property sales prices Q3 – Munster – Sellers’ expectations of property prices –
agents’ views. Percentage of agents agents’ views. Percentage of agents
reporting that property prices had: reporting that sellers’ expectations had:
100 100
80 80
“
60 60
40 40
20 20
0
National Munster
0
National Munster
A CASH BUYER
Increased Stayed the same Increased Stayed the same
WILL TRUMP A
Decreased Decreased
MORTGAGE HOLDER.
IF THEY HAVE MONEY
Agents working in the Munster region in 2019 The market can have changed since reports were
reported that the year was stable, with published, and sometimes the property sales ON DEPOSIT, THAT IS A
increased activity in the first half of the year
reducing as the year went on. Prices and rents
which the media cover are high-end properties or
ones with added extras – extensions, new
SAFER BET FOR A VENDOR.
did not fluctuate as much as they had in Dublin
and this allowed greater clarity for both
kitchens – which their house does not have, or
the house was in a different region of Munster.
THEY ABSOLUTELY WILL
vendors and buyers. During the latter half of People are much more clued in about prices but TAKE A LOWER BID IF IT
2019, media discussion about a Brexit “worst there is always education needed to moderate
case scenario” resulted in calming a market their expectations.” IS IN CASH.
which otherwise may have seen greater spikes These agents noted that any increase in
in prices caused by excessive bidding on the vendor expectations was likely to have potential purchasers, and in this situation cash
too-few properties which came onto the occurred during the first half of the year and buyers will always beat those who are
market in 2019. optimism fell in Q3 as the number of viewings purchasing with a mortgage.
Agents reported a significant decline in both and interest from potential purchasers “A cash buyer will trump a mortgage holder.
instructions and transactions in the second declined during the year. If they have money on deposit, that is a safer bet
half of 2019. This reflects a pattern seen in the “There was absolutely a decline in instructions for a vendor. They absolutely will take a lower bid
other regions, and was caused both by a and activity in the third quarter. People realised if it is in cash. In the past, someone would go back
reduction in consumer sentiment, uncertainty that there will be a Brexit and they held off to their bank and ask to borrow more. They can’t
about interest rates and other macro- making any decisions. In 2020 we will probably do that now.”
economic policies and the unavailability of start to see an increase in enquiries as we According to this agent, mortgage approval
bank discretions about mortgages. understand what that means but it will take a should be granted for a longer period of time,
It was notable that vendor expectations while for that to translate into increased rather than the current six months. People
increased slightly in 2019. One agent who was prices again.” obtain mortgage approval and then begin
interviewed noted that many potential vendors In 2019, a larger cohort of buyers were cash looking for somewhere to buy; as there is a
are strongly influenced by media reports about buyers, with sales driven by people who had very low supply of property in Munster, by the
sale prices. been bequeathed money or couples who were time they have found somewhere, they could be
“People do read the media about house prices but moving in together and had a home to sell. at the end of their approval period, and need to
they forget that this is historical information. However, this is a small and finite number of seek a new approval.
SCSI RESIDENTIAL PROPERTY REVIEW & OUTLOOK 2020 25You can also read
