Busy year in Cork's 2022 residential property market

The lure of living outside of the city has never been so prevalent, with some exceptional country homes sales, says Savills director Catherine McAuliffe

Land Development Agency & Cork County Council Affordable Purchase Scheme at Clonmore, Ballyviniter, Mallow

The Cork residential market has experienced one of its busiest years ever on record these past 12 months, full of substantial price increases, frantic bidding scenarios, sell-out new-homes launches and some very strong price evidence on the resales side.

Minister for Housing, Local Government and Heritage Darragh O’Brien at the launch of a 2022 co-operative housing scheme

New homes prices increased 7%-9% in the greater Cork area year-on-year while resales have seen a wide range between 7%-10+% dependent on quality andlocation. The number of homes sold in Cork for over €1m has doubled this year with well over 40 now on the Property Price Register.

Savills Cork closed 70% more new homes sales in 2022 than in 2021, an indication of how strong the market has been for the year.

Stock levels remained consistently low throughout the year, with transaction levels for the year expected to reach that of pre-pandemic levels of 2019 at in or around 6,500 units.

Constantia Farm, a modern house on 27 unzoned acres at Compass Hill  Kinsale made c €5.5m in 2022, bought by an Irish businessman as a family home 

Highlights of the year include the record price for a waterfront property in Kinsale, Raffeen in Scilly for €4.75m, trumped by Kinsale Constantia Farm at c€5.5m once the land it’s on above Compass Hill is added in, with rumours in the market that Dripsey Castle has sale agreed at an even higher level, not yet on the current Price Register, and likely to end up in 2023 sales results figures.

Country Homes sales were a huge feature of the market this year and the lure of living outside of the city has never been so prevalent.

Waterside is always a determining factor when it comes to price achievable, and in West Cork, Stone Hall in Glandore achieved the highest price of €3.4m, while sales in our neighbouring county Kerry have also seen a much higher number of sales registered in excess of €1m, the highest being an off-market sale in the region of €2.4m close to Caragh Lake.

On the new homes side, a large number of small releases in many new homes developments throughout the year were generally sold in a matter of minutes due to the pent-up demand from first time buyers, now potentially qualifying for both the Help to Buy Scheme and the First Homes Scheme, dependent on price and local authority.

Houses that qualify for the First Homes Scheme have a price cap of €350,000 in Cork County and €450,000 in Cork City, while apartments in the city are capped at €500,000.

The uptake has been slow on the First Homes Scheme to date, but the expectation is that this will open up the market to a new cohort of buyers, together with the new Central Bank rules of being able to borrow four times the household income.

Interestingly, we have still not seen any new private apartment schemes commence construction in Cork in 2022, despite the fact that planning permission currently exists for c1,129 units, on top of c6,000 houses with planning permission which have not yet commenced.

Cost rental apartments completed at Lancaster Quay in 2011

The challenge of viability still remains for apartments with constantly increasing construction costs affected by inflation andlabour shortages.

That said, with the introduction of the Croí Cónaithe fund to support the building of apartments for sale to owner-occupiers, we should see some start on construction next year.

Thought should be given, however, to extending this viability
incentive to include investors, which would help to ease the logjam of rental demand in our city.

Speaking of rentals, at the start of December there were just 25 properties available for rent in Cork City, and 27 in the remainder of Cork county.

These levels are at an all-time low, which in itself is driving
rental costs beyond the affordable for many.

Factors such as the war in
Ukraine, Covid, Brexit, and the rising cost of living have all had a negative impact on our current housing situation, which can only be called a crisis.

Clearly, modular housing must be the way forward to help ease the crises that not only exist now for immigrants to our country who require their urgent housing needs addressed, but also for the young people of Ireland, many of whom are now unable to afford to rent and are stuck in their family homes.

Interest rate hikes are pushing borrowing limits for those who wish to purchase, and when they can afford to buy, there still remains a very low stock level in the market.

An Bord Pleanála  approved plans for 185 houses and 114 apartments under the SHD/fast-track planning process in 2022 for Annabella, Mallow

Next year looks to be another challenging period with no real sign of stock levels increasing. Sentiment is expected to remain influenced by all of the challenges mentioned above, while prices are expected to level off with low single-digit inflation.

The market now waits with baited breath to see what the Government might do next.

The introduction of incentivised faster building methods (such as the Springvale development in Chapelizod, Dublin, pictured above) and a more robust, streamlined planning system to ensure market demand is met with appropriate stock might be a start.

Catherine McAuliffe is a director of residential at Savills Cork