Flats and holiday homes face 30% price fall

PRICES for apartments and holiday homes could fall by between 20% and 30% this year, a top property consultant has warned.

Savills Ireland said while prices for mature houses in urban areas may have bottomed out, the apartments market could see price falls of up to 20%, especially for those located in outer suburbs and rural towns.

Savills said there was virtually no market for this sector other than premier properties with sea views in very desirable holiday spots. Values could plummet by up to a further 30% in less popular/oversupplied locations.

Recently built houses in outer suburban towns may fall by a further 15%.

Savills said there was a degree of equilibrium in the marketplace at the moment between the number of buyers and sellers for mature city houses.

The director of residential property at Savills, Ronan O’Driscoll, said values for such homes were “virtually at the bottom”.

Mr O’Driscoll claims values for urban property, particularly in Dublin, were holding and competitive bidding could even lead to some modest growth.

On a more positive note, it is predicted that agricultural land values could record single-digit growth in stronger locations, while overall values of farmland are expected to hold firm.

Savills anticipates that rents for city properties will continue to rise by 5%-10% as people continue to prefer to rent rather than purchase given the economic climate.

Mr O’Driscoll said there was still a significant overhang of 5,500 apartments in the greater Dublin region, although it has reduced from 11,000 units two years ago.

He claimed many of these apartments were likely to be sold to investors over the coming years.

“The apartment market will remain challenged for some time,” he said.

He predicted that all sectors of the market will have bottomed out by 2014.