Remote working and flight from cities ‘driving rise in property prices’

Remote working and flight from cities ‘driving rise in property prices’

Average house prices have risen by 3,500 euro per month since the end of June (REA/PA)

The race for remote working space and the urban flight from cities is driving a huge rise in property prices outside major cities, a survey has found.

Average house prices have risen by €3,500 per month since the end of June, with selling prices in commuter areas and small towns increasing by more than double the growth experienced in major cities.

A massive demand for properties outside the capital has seen unexpected quarterly rises in towns such as Nenagh, Tipperary, where scarcity of supply and bidding wars meant that three-bed semis have sold at 23% above their recent value – an increase of €45,000.

The REA Average House Price Survey concentrates on the actual sale price of Ireland’s typical stock home, the three-bed semi, giving a picture of the second-hand property market in towns and cities countrywide.

The price of a three-bedroomed semi-detached house across the country rose by 4.1% over the past three months to €264,056, representing an annual increase of 12%.

The biggest rises in quarter three came in commuter counties and the country’s large towns as buyers continue to move further from the capital in anticipation of long-term remote and hybrid working.

They are being joined by a surge of interest from ex-pats, anxious to return to Ireland after the pandemic, with more set to return when family homes become available.

The rural and commuter area increases are double those being experienced in Ireland’s major cities, with Dublin increasing by 2.3% to €467,000 and Cork Limerick and Galway by an average of 2.4% to €281,750.

Rural flight

REA spokesman Barry McDonald said: “The survey’s average of four weeks to sell should be even lower because, while bidding is fast and furious, vendors are not rushing to accept offers.

“With an exceptional shortage of stock, demand is being fuelled by an increase in mortgage-approved buyers on the market.

“The rural flight, which began during lockdown, shows no signs of letting up, even in the face of a return to office working.

“In Stoneybatter, REA Fitzgerald Chambers report that all sales in the quarter were for vendors who are moving out of Dublin to locations around the country.

“The effect of this is being felt nationwide with counties such as Tipperary (9.2%), Donegal (8.4%) and Kilkenny (7.3%) all experiencing sharp rises in Q3 as buyers seek value locations.

In Nenagh, REA Eoin Dillon has reported that three-bed semis that previously fetched €190,000 have sold for €235,000, such is the scarcity of supply.

“Our agent in Roscommon REA, Seamus Carthy, reported that 75% of sales in the last quarter were family homes for people who are returning to the county from cities.

“In my own suburban area of Lucan, we are seeing a combination of people selling to move further afield and buyers moving out from the city centre because they feel they don’t need to be in walking distance of the office any more.”

Three bed semis in commuter counties rose 4.6% by over €12,500 in the past three months to an average of €282,500, with the average home selling in just three weeks.

As the flight to rural locations continues, prices in the rest of the country’s towns rose by over 4.9% in third quarter to €185,379.

Michael Boyd of REA Boyd’s, Kilkenny city, said “There is a surge of interest from buyers in Dublin and ex-pats wanting to come home.

He said that average prices in Kilkenny have risen by €17,000 to €275,000 and properties are now moving in two weeks.

“We saw 90 mortgage-approved applications to view one property in three days,” he added.

“The reserve was €200,000 and it sold for €280,000 at an online auction on Bidnow.ie.”

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