Prices up as supply lags

CORK’S new homes market is about to surge - but prices are still expected to grow by up to 10% during 2003.

That forecast for price inflation in the greater or metropolitan Cork area comes against a backdrop of a 6% house price rise forecast nationally by members of the Irish Auctioneers and Valuers Institute, reflecting a local gap between supply and demand which is likely to continue during the year.

Already, some new house developments have seen prices rise by over 20,000 since the start of 2003 and second-hand prices in the western suburbs have taken a swift start-of-year hike as supply remains tight.

Michael O’Flynn, Chairman of the Cork House Builders branch of the CIF, says new home prices will rise in 2003 by up to 10% - despite other national estimates of just 0% to 6%.

“Economic experts talking about house prices tend to speak about Dublin as if it applies to the rest of the country. Dublin may be experiencing a cooling of prices, but with demand continuing as we predicted and the overall supply remaining tight for a variety of reasons, there will be further pressure on house prices, especially in some areas of strong demand,” said Mr O’Flynn.

A number of land deals just concluded and projects coming through planning, may see the last large schemes in the traditional housing areas of Cork areas coming on stream in the next 18 months. Sites include Ballincollig and the barracks site, with 800 units at the latter and up to 1,500 in all for the greater area; 400 at Mahon Point and over 1,000 for the greater Douglas catchment.

With the new County Development Plan in its final stages this week and planners about to get to work on more specific Local Area Plans as well, it is hoped the supply/demand gap will narrow in the coming year or two (over 1,400 of the 1,800 submissions to the County Development Plan were for rezonings, though only a percentage were ultimately approved.)

On the back of rezonings, one company, O’Brien and O’Flynn, has spent over €30 million on land purchases in Douglas/Rochestown/Passage West.

The company, currently halfway through its 500-house scheme at Maryborough Woods (see picture) paid €17 million for 87 acres of land (with only 56 zoned acres) by Douglas Golf Course on Maryborough Hill.

Subject to planning, it could accommodate up to 700 new homes. It also paid an unconfirmed 13 million for more land at the Rochestown Road end of Passage West which will take up to 500 more homes.

The same company paid 4 million to the Fitzpatrick family, previous owners of the Silversprings Hotel, for 22 acres on the old golf course for up to 300 houses and has 36 apartments under construction. O’Brien and O’Flynn also have 125 homes at Eagle Valley in Wilton under appeal with Bord Pleanala. “We buy land where the market wants to buy houses,” said developer Denis O’Flynn.

Also on the Rochestown Road, McCarthy Developments this week sought planning for 79 more apartments as a further phase of its Harty’s Quay development.

Major schemes on the way include projects from other main house builders. O’Flynn Construction proposes over 800 houses in Ballincollig, now in the planning process, and the same company has planning for 125 houses in Crosshaven, with additional land there for further development.