House prices in parts of Cork City have increased by more than €100,000 in just five years, writes Kevin O'Neill.
Signs that the recovery is in full swing are evident throughout the housing market in Cork. Prices are surging in every single micro-market in the city, with city centre asking prices now an average of €102,862 higher than they were when the market hit its lowest point in 2013, according to data provided by property website Daft.ie.
While prices have yet to return to the highs of 2006-2008 when the city average asking price did not drop below €300k, the market has now seen five consecutive years of growth.
Within the city, the market is showing different rates of increase.
The south and west sides are home to the largest changes in asking prices, increasing by more than €100,000 in some cases, but the biggest proportional increase is actually on the north side of the river in Blackpool, with prices increasing by almost 90% in just five years.
Rochestown has always been one of the most sought-after parts of the city and asking prices have increased by €105,794 in the last five years. The average asking price is now €335,276, which is still €120,000 less than it was at the peak of the market in 2007.
There are just four areas in Cork City to have passed the €400,000 threshold for asking prices, according to the Daft.ie data, with Rochestown remaining above this mark in each of 2006, 2007 and 2008.
By 2012, prices had more than halved, collapsing by 53% to €214,233.
Trends are similar in the City’s other most expensive areas in Douglas, Blackrock and the Bishopstown/Wilton area.
In Douglas, prices have increased by €111,629 since 2013, recovering to an average asking price of €309,838. The biggest increase is in Blackrock, though, where house-buyers are now being asked for €135,151 more than in 2013. Prices have increased by 75% to €315,772 on average.
Asking prices in Bishopstown/Wilton passed the €300,000 threshold in 2017 and are continuing to climb. They are now, on average, €118,937 more expensive than in 2013, with an average asking price now€€312,311.
In Cork city, prices have increased by more than 40% since 2013 in every single micro-market. The average asking prices have not recovered to the 2006-2008 period as yet but the trends are only moving in one direction.
Based on the data available, it would not be surprising to see several more areas creep over the €300,000 threshold before the end of 2019 for average asking prices.
Prices in Montenotte and Tivoli reached an average of €284,689 by the end of last year, an increase of more than €88,000 for the same area since 2013. At 45%, it is actually the slowest inflation in the entire city area and is a simple matter of supply.
The same cannot be said about other parts of the city’s northside.
The Ballyvolane/Mayfield area is seeing a sharp increase, with average asking prices climbing by 54% or €80,000 since 2013. Asking prices are just short of €230,000 in the area. It is the highest it has been since 2009 when prices were averaging €258,055.
It is Blackpool that has seen the sharpest rate of increase in Cork city or county. Blackpool hit its trough in 2014, with prices bottoming out at €91,399. Since, prices have increased by 88.78% to €172,551, an increase of just under €75,000.
The area in the immediate vicinity of the city is increasing rapidly too.
Ballincollig and Carrigaline are seeing strong growth. In Ballincollig, asking prices have increased by €117,886 in the last five years to €296,779. It is a 66% growth, which is stronger than many areas in the city and asking prices are sure to pass the €300,000 mark this year. Trends are similar in Carrigaline. By 2013, prices had dropped to €171,231 but have increased to €275,478 as of the end of last year.
Ronan Lyons, economist at Trinity College Dublin, said that the trends in Cork City are reminiscent of those elsewhere. A lack of supply is causing prices to increase sharply in many areas as demand increases.
A huge influx of new employment in the Cork City area is causing a spike in all markets.
“The market in Cork is showing similar trends but is not as extreme as Dublin,” Mr Lyons said.
“It is a case of strong demand and meek supply.”
While new housing completions are increasing year on year, data from the CSO shows that there were just 526 dwelling completions in Cork city last year. The bulk of construction activity in the city is focused on hotels, offices and student accommodation, which will make little difference to the private housing market and its pricing.
Mr Lyons said, “The question has to be asked about the cost of development. If employment is up and spending is up then why isn’t housing development up? There is a real lack of smaller housing and apartments and questions have to be asked about the costs associated with development.”