Small can be beautiful too

City buyers cutting cloth to their financial means, stressing location over size Tommy Barker reports.

Small can be beautiful too

DUCKS ALL IN A ROW

It’s not just the big and/or trading up houses that went well in 2013, smaller ones needing work also tipped away — or took off, depending on location. A good comparison is the row of 1970s townhouses in a spot like Orchard Close, Ballincurrig, Douglas (pic above.) Here, a mid-terraced two-bed sold in 2011 for €165,000, the next two sales of the same style older houses were for €175,000, then €187,000, and this year one offered with a guide of €185k (and identical to the 2011 one for €165k) was bid right up to €219,000. All four were with agent Dennis Guerin of Frank V Murphy, who had sold the original Lane Bros development as an apprentice in 1975. All four houses needed upgrading. Also in the same small scheme, another mid-terraced two-bed, extended, upgraded and with a good BER made €240,000 with Tim Sullivan in a sale which closed this week.

SITES FOR SORE EYES

Eyes were on sites in 2013 in and around the cities. Established builders in Dublin have been chasing after and buying up sites to build houses, for which they know there’s a ready market, while in the southern capital two great house-building sites went to market. Nemo Rangers’ former pitches off the Douglas Road, and Eircom in Ballintemple were up for grabs, the former bought for c €3m via Savills, with the buyer’s identity still not public, while Lisney have the Eircom site in advanced negotiations around €2.5m, well over its guide, after a huge volume of inquiries.

A question is what density planning and house types will the site buyers put on their purchases? The market wants family homes, semis and affordable detacheds.

Builders went onto smaller sites in the settled suburbs: Rockforest Homes are building six A-rated detacheds on a tight site on the Boreenmanna Road, sold off plans (just under €400k, to a builders’s finish) and by word of mouth via Casey and Kingston, while another seven, smaller two-bed semis/ townhouses are going like hot-cakes from €170k on an infill site on Evergreen Street with Jeremy Murphy.

Up on Maryborough Hill, Olivia O’Leary of Thos J O’Driscoll sold 10 house sites within a few days to a list of intending buyers, plots ranging from 0.2 to 0.5 of an acre, priced from €300,000. Almost all of the buyers have gone for fresh or different plannings for their buys, bringing some happy days to architects in 2013, and to contractors in 2014. The land had planning in place for houses of 3,400 to 3,800 sq ft, but most buyers are aiming to build smaller. “Nobody really wants 3,800 sq ft now. People have realised you have to build it, furnish it, heat it, maintain it and clean it. This is a new reality,” notes Ms O’Leary.

OUT OF OFFICE

Dublin’s city office market is hot, and space there is fast running out — and Cork City had more office space taken up in 2013 than in the three previous years combined.

Ed Hanafin of Lisney totals 350,000 sq ft of office take up for the year just ending in Cork and says a further 150,000 sq ft is being negotiated on, with 2014 looking to be busy.

Sources says a handful of companies actively looking at Cork have the potential to bring hundreds of new jobs: the pharma company Eli Lilly which purchased a 65,000 East Gate O’Flynn Construction building at a total cost of €10m (including fit-out) in the past month was the first of the scouting handful to break cover. According to Lisney’s Mr Hanafin “multi-national occupiers are driving the market”.

Call centre Abtran took 60,000 sq ft at Blackrock Business Park (previously Motorola, now owned by O’Flynn Construction) off Skehard Road, while EMC took 50,000 sq ft in John Cleary Development’s spectacularly successful City Gate Park Mahon, where RDJ also took 26,000 sq ft, and FireEye and Qualcomm each took 20,000 sq ft to make Mahon a new, key employment hub.

Bord G•is took 20,000 sq ft at Webworks while the Irish Examiner and Evening Echo moved to 20,000 sq ft in Linn Dubh, Blackpool. There’s now very little modern available space in the city centre, and the older stock needs rents to rise to justify refurbishing them, say Lisney.

Letting and rent levels of the two floors at City Quarter, Lapps Quay vacated by the Examiner accommodation on the top two floors of City Quarter, Lapp’s Quay and currently available “will set a tone for prime city centre office rents for the year ahead,” notes Mr Hanafin.

THE NAME’S BOND?

Money in the bank is increasing being seen as dead money, what with low interest rates and DIRT tax increases; throw in any price inflation on top of that, and well, savings can go backwards.

That’s one of the strong reasons for so much cash piling into property in the past year: estimates reckon that over 55% of all house and apartment buys were for cash (up from 30% in 2009), either from savers, those who’d sold property in the past several years, other beneficiaries of the boom (eg, land sellers) and cash coming in or back from abroad. There’s an emerging , reckoning that Irish prices have reached the bottom in many locations, so buying now can provide a rental income and potential capital uplift, with sales in seven years time free of Capital Gains Tax.

Meanwhile, many people with cash on deposit on banks have looked at Prize Bond options — the money’s guaranteed safe, and there’s always the chance of a win, big or small.

In 2008, €804m was saved in the Prize Bonds fund: by the end of Oct 2013, that had more than doubled to €1.9bn. However, on Dec 8, the NTMA reduced all State Savings interest rates, including dropping the Prize Bond fund return from 1.75% to 1.6%, so from next year they’ll reduce weekly €100 prizes from 500 to 250. The covetable €1m win will still go out every second month, though, free of tax and DIRT. And, sure then you could use it to buy a grand house.....

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