Signs of recovery are being felt throughout the Munster housing market — but inflation is inconsistent throughout the region, writes Kevin O'Neill
Large towns and cities are leading the way but inflation has not spread evenly. Despite showing regular growth in each of the last four years, many markets in Munster still lag significantly below the national average for asking prices.
However, this average is being largely driven by Dublin and the wider Dublin region, with Munster’s cities, in particular, showing strong growth. Every market in the province increased by at least 30% in the last five years, with asking prices now a minimum of €40,000 more than they were in 2013, according to data provided by property website Daft.ie.
Asking prices nationally reached €252,796 at the end of last year. It represented an increase of more than €88,000 since 2013, some 53%. It is still more than €100,000 below the peak of the Celtic Tiger when the national average asking price was €367,210, peaking in 2007.
At the end of 2018, the average asking price in Munster hit €197,218, an increase of €55,000 in five years.
The growth has been steady but lags behind the national trend.
The Daft.ie data shows that nationally, average asking prices have increased continually since 2013. They hit their lowest point at €164,730 in 2013, increasing to €182,000 by the end of 2014 and growing since.
In contrast, prices hit their lowest point in Munster in 2014 when they landed at €140,541. It was only €1,000 less than the previous year, but it showed the extent of the issues outside the wider Dublin region, which has driven much of the growth on a national basis.
Within the province, it is no surprise to see that the bulk of the growth has been concentrated on the cities as this is where the bulk of the new employment is.
In Cork city, average asking prices reached €271,145 last year, an increase of more than €100,000 in just five years. It was a growth of 61% in that time, exceeding the national average and the increase seen in Dublin for the same period.
Prices in the capital increased by 57% from 2013 to 2018.
In county areas in Cork, prices have increased by €70,265 in five years to €218,270. Much of this is being driven by areas close to the city, with the likes of Ballincollig, Carrigaline, Crosshaven and Kinsale all seeing particularly high levels of inflation in the last five years.
But, beyond Cork, inflation in Munster has been more steady.
In Limerick City, prices have increased by €67,781 since the market reached its lowest point in the city in 2014. At that time, the market in Cork and Waterford had already returned to growth.
Similarly, Limerick county did not bottom out until 2014, when prices hit €134,611. At the time, this was €50,000
less than the national average. There has been some recovery since but the gap between prices in Limerick county and the national average has now widened.
The average asking price in Limerick is €183,002, €70,000 less than the national average.
In Waterford city, asking prices reached an average of €171,493 at the end of last year. Would-be buyers are now being asked to part with €63,163 more than they were in 2013.
In county areas, the inflation is even stronger, increasing by €66,071 in five years, reaching €215,164, the highest price in Munster outside of Cork.
In Co Tipperary, the average price is €172,553, an increase of €40,008 in five years, while prices in Co Clare have increased by €53,492 to €179,000.
In Co Kerry, prices are now €190,266, an increase of €45,000 since 2013 and the demand is concentrated on areas of business and jobs. Towns like Killarney and Tralee are showing much stronger growth than Listowel, for example, with the Ring of Kerry and Dingle also increasing quicker than other parts of the county.
Outside of Munster, the picture is very clear. The national average of €252,796 is being largely led by Dublin and the wider Dublin commuter region.
The regional average for Connacht-Ulster is just €158,129, €40,000 less than Munster and almost €100,000 less than the national average.
Ronan Lyons, economist at Trinity College Dublin, said that the trends in Munster are quite typical of many parts of the country. Prices in cities are picking up at a much sharper pace as employment increases.
“In Munster, the trends are clear: the growth of jobs is concentrated in the cities but the overhanging supply of property is at its smallest in the cities,” he said.
“Dublin, Cork and Galway are at the forefront of the market, it is where the recovery is most felt. But it is the case in other areas too, the recovery just isn’t as pronounced.”
Mr Lyons said that people are essentially opting to travel further as a result of the Central Bank rules.
Current rules cap lending at 3.5 times income, barring some exceptions. Most of these exceptions are being granted in the wider Dublin area.
“People are just looking further out,” he said. “€250,000 will get you a lot more in the county in comparison to the city. As a result, people are essentially just getting around Central Bank rules by opting to spend the difference in fuel and time instead.”