€15.8bn worth of Irish residential and commercial property sold in 2015

Recovery in property market has now spread beyond Dublin with value rising by 28%

Research shows a 6 per cent year-on-year dip in the volume of spend in commercial property to €5.1 billion

Research shows a 6 per cent year-on-year dip in the volume of spend in commercial property to €5.1 billion

 

Some €15.8 billion was transacted across the Irish residential and commercial property markets in 2015, a rise of 6 per cent on 2014 but at a weaker year-on-year growth rate.

This is according to new research from DTZ Sherry FitzGerald which also confirmed that the recovery in the property market, initially led by Dublin, is now much more broad-based. While Dublin still accounted for the majority of capital inflows into property, its percentage of the total was down 6 per cent in 2015 to €8.9 billion.

“The value of property transactions outside of Dublin increased by 28 per cent during 2015,” said Siobhán Corcoran, associate director with DTZ Sherry FitzGerald Research.

“Activity was bolstered by a strong performance in the regional centres, most notably Cork and Galway. The value of transactions in Cork rose to €1.4 billion in 2015, up from €1 billion in 2014. Furthermore, 2015 saw continued strong performance recorded in the Dublin commuter belt counties of Meath, Kildare and Wicklow.”

Residential market

In terms of sector performance, the research found that the residential market absorbed 68 per cent of the overall capital spend and the commercial sector accounted for 32 per cent.

Individual house sales accounted for 93 per cent of activity in the residential sector, with the residential/multifamily sector standing at 7 per cent, or €747 million in 2015, while capital values in the residential market rose 13 per cent.

Most of this capital growth, however, was recorded outside of Dublin where the regional centres of Cork, Galway and Limerick accounted for notable increases.

On the commercial side, following a record year for capital inflows in 2014, the research reported a 6 per cent year-on-year dip in the volume of spend to €5.1 billion. But the value of development land transactions was higher than in 2014, while 7 per cent of transactions in 2015 were accounted for by the hotel sector.

Key drivers

Some 69 per cent of commercial transactions were in Dublin but the investment spend outside the capital rose 32 per cent during 2015. Cork, Limerick and Galway were the key drivers of regional commercial investment and accounted for more than 10 per cent of the total commercial spend.

Aidan Gavin, managing director of DTZ Sherry FitzGerald, said 2015 saw an increase in the profile of the domestic investor, both as a direct investor and as a co-investor with international capital.

“This trend will continue into 2016 as the next layer of international capital and funders enter the market and I believe the outlook for 2016 looks positive following a solid start to the year,” Mr Gavin said.

“While there is optimism, underpinned by strong economic conditions and robust market fundamentals, the volume of commercial asset sales is likely to be below that of 2015. We are entering a period where the deleveraging institutions have largely disposed of the majority of their larger assets and re-traders are gaining momentum.”