Positive signs for new home buyers as supply is starting to pick up
Arderrow housing development on the road between Fox & Hounds pub, Ballyvolane, and White's Cross, where four-bed terraced homes of 1,584 sq ft start from €475,000. Picture: Eddie O'Hare
New homes supply is picking up pace across the expanded Cork city metropolitan area, and across the county, from east to west, but not in any sort of volume to curtail the steady rise in prices, as home hunters – and first-time buyers – can readily attest to.
Back five years ago, private buyers could have hoped for a ‘standard’ starter three-bed home of c.1,100 sq ft for under €300,000. Now, the starting point for many is coming in around €320,000, and that’s not even for a three bed terraced home or townhouse, it’s for a two-bed. So, as prices incrementally ratchet up, you are getting less house, for more money.
Even from a base point of construction, new house values vary naturally enough according to size, location, features, aspect, builder reputation, levels of confidence, and supply, etc.
One point of comparison is to compare two very recent (February 2024) brand new development launches (via Sherry FitzGerald) in and around Cork from well-established home builders the O’Flynn Group as a sort of benchmark that all other builders would reference in their own pricing.
O’Flynn’s long-awaited Midleton scheme Lakeview had a release on Feb 23rd, with an entry point of €315,000 for a two-bed 950 sq ft terraced home, while end-terrace/semi-detached three beds of 1,229 sq ft started at €397,500, and slightly larger three-bed semis of 1,260 sq ft started from €425,000.
Taking those semis at just under €400k and €425k, it contrasts with May 2017 and the (now completed) Clonlara scheme by O’Flynn Group in Cork’s Kerry Pike, when the market at that time started to regain real post-crash momentum.
Back then, in 2017, three-bed semis of 1,110 sq ft were released at €285,000/€295,00. By March of 2018 in a next phase release, slightly larger c.1,200 sq ft Clonlara three-bed semi-ds were priced at €325,000, a clear €100k cheaper than today’s Lakeview Midleton three-bed semi-ds.
Broadly similar market-reflective prices per square foot were seen also in O’Flynn Group’s launch just last month of Arderrow in Ballyvolane, also with Sherry FitzGerald.
Entry point here just north of the old city suburbs, in a rapidly expanding area with several active schemes in train, was a 880 sq ft two-bed terraced home type priced from €320,000.
Three-bed semi-ds of 1,123 sq ft started from €397,500, and larger three-bed of 1,260 sq ft (both semis and end terrace) were at €420,000.
Want or need a four-bed? At city bus route accessible Arderrow in Ballyvolane four-bed terraced homes of 1,584 sq ft started last month from €475,000; in Lakeview, by the main roundabout just east of Midleton town, a four-bed semi of 1,517 sq ft type is currently offered at €490,00 and a slightly smaller 1,493 sq ft detached type is offered at €525,000.
To go back to the comparison with same builder O’Flynn’s Clonlara scheme by Kerry Pike, they had four-beds released by March 2018 priced at €345,000 for four-bed semis of 1,334 sq ft (so slightly smaller than the above Ballyvolane and Midleton examples), and 1,500 sq ft detacheds at an even €400,000. Larger four-bed detached of 1,817 sq ft were available there in spring 2018 at €455,000.
Perusing these pages today will give an idea of the price range of other schemes currently on offer, or coming soon: contrast them with the average price in Cork of a second-hand three-bed semi-d, currently sitting at about €285,000, but obviously for older, colder stock (the resale market typically is four to five times stronger than new homes, volume wise).
Go further out of the city and you’ll get a three-bed semi for just under and over €350,000. Case in point is a launch coming shortly (with Global Properties) of 90 homes at Gurteenroe, Macroom with 1,170 sq ft semis at €350,000 to €365,000 and with entry level mid-terrace 1,050 sq ft three-beds at €317,500 (the development won’t offer any two-beds).
Meanwhile, noting that their own New Homes development section had almost 20 launches in 2023, Savills say “supply has certainly increased across Cork city and county over the last number of months with new developments and new developers entering the market.”
While they say that price points changes varied “depending on the development, area, house type and size however taking a general look at the new homes market, an increase took place in the region of approx.10% over a 12-month period,” notes agent Elizabeth Hegarty of Savills.
Buyers “certainly have more choice in the new homes market at the moment with the increase in developments,” she continues but finds that buyers have set criteria “and they are willing to wait to find a home that meets these. Top priority criteria we see is area, the house type and the internal size and living space.” However, there’s a shortage of new detached homes in the 1,800 sq ft to 2,000 sq ft size range for traders up and “this is leaving a gap in the market for those who may have bought a two- or three-bed home a few years back and now with growing families need a bigger house with more space,” Elizabeth Hegarty says.
“Their preference would be an energy efficient home as they may have been living in a new home for the last number of years but that stock and offering to the market just isn’t there, so they have no option but to look in the resales market,” Ms Hegarty reveals.
The First Home (shared equity scheme) is now 18 months in and finding its feet and momentum, broadly hailed as a very welcome initiative by home-hunters, builders and selling agents.
However, the First Home initiative, and the allied Help to Buy scheme, are arguably contributing price inflation as a demand-side initiate rather than increasing supply: a telling graph presented to house builders at a 2023 CIF seminar showed how a buyer paying €2,000 a month of a five-year fixed rate mortgage using a 10% deposit could cut repayments down to €1,350 per month using Help to Buy, First Home and a fixed rate Green Rate mortgage. That widens the buying pool, for sure.
Sherry FitzGerald Cork’s new homes director, Paul Hannon, reveals a ratio of three or four times demand to buy compared to availability, even after selling 50 homes a week on average in the autumn 2023 period.
Paul remarks that Help-to-Buy data prior to Christmas revealed just a 23% success rate out of over 27,000 applicants: “The gap between applications and successful claims illustrates the mismatch between demand and the available housing stock, underscoring the supply-side challenges in the housing market.”
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