Prices stabilise at the end of a bumper year

At the end of yet another bumper year in the Dublin property market, house prices are at last beginning to stabilise, according to leading estate agents who see a steadier property market emerging next year. While house prices are thought to have risen by between 15 and 25 per cent in the capital since January, more modest increases of 5 per cent to 15 per cent are predicted for 1998.

Dublin house prices have been climbing steadily for the last five years and the average price of both new and second-hand homes has more than doubled since 1993.

Million pound sales have become commonplace at the top end of the market. In 1997, under a dozen Dublin houses sold for a million or more. This year, more than 30 properties changed hands either at auction or by private treaty for prices between £1 million and £5.9 million. However, after a year of headline prices, values are now levelling off due to a greater supply of property available at almost all levels of the market. The near elimination of the investor from the residential market following the Bacon Report had a cooling effect on prices, as there was less competition, particularly for townhouses and apartments, but also for period properties across the price bands. Galloping prices in the first quarter of the year resulted in a huge supply of property being offered in the summer and autumn. Auction numbers were up almost 40 per cent over the year, with a huge concentration in the May-June, September-October periods. Buyers, who had been starved of choice for two or three years, suddenly found themselves in a position to choose between several properties in their price range.

According to official figures from the Department of the Environment, second-hand house prices in Dublin rose by almost 15 per cent in the first six months of the year, the latest figures that are available. However, Sherry FitzGerald maintains that Dublin house prices rose by 17 per cent in the first quarter alone, followed by much smaller percentage increases in the following three quarters. It forecasts less spectacular price rises of between 8 and 12 per cent next year.

Tom Day, a director of Lisney, describes 1998 as an outstanding year for Dublin property and so he might, having fetched an incredible £5.9 million for Sorrento House, a semi-detached Victorian house in need of refurbishment in Dalkey. Mr Day anticipates that prices will begin to level next year, with overall growth between 10 and 12 per cent. Paul Newman of Douglas Newman Good agrees that the rate of price increases will fall next year, as supply matches demand and buyers face less competition for homes. "Prices rose by about 15 per cent overall this year. A similar level of increase next year would be undesirable and would make the market unstable. But it's unlikely to happen because despite the expected drop in interest rates, people won't have to compete so much." He expects a price rise of about 5 per cent. Gunne's residential property director, Frank Doonan, agrees that the extra supply seen in the market this autumn resulted in a dampening down of prices. "We have three times as much property available now than we had this time last year, and a lot of property is coming on in the new year. The combination of supply and seasonality has led to a cooling off in prices," he says.

However, property at the top end of the market will continue to increase in value, he says. "We are still seeing increases in the more exclusive enclaves of Dublin and we would expect those to continue into next year. There will be some heat in the market with overall increases of around 10 per cent."

Period redbrick houses in Dublin 4 and 6 were the consistent bestsellers this year, as buyers put a premium price on property close to the city centre. Victorian redbrick semi-detached houses which would have cost £600,000 to £800,000 last year are now changing hands for between £1 million and £1.5 million.

AT THE other end of the market, 1998 was the year when many first-time buyers in Dublin must have given up hope of getting a home of their dreams close to the city centre, as houses in popular areas, such as South Circular Road and Stoneybatter, slipped beyond their grasp. Former local authority or artisan two-bedroom and three-bedroom homes, in places such as Drimnagh, Crumlin and Walkinstown, rose by 15 to 20 per cent or more this year. The same is true in trendy Stoneybatter, where prices went up by about 25 per cent.

Second-hand apartment prices kept up a strong pace, with the cheapest one-bedroom units in the city now starting at around £75,000. un Laoghaire, former local authority homes rocketed in price by about 25 per cent, with three-bed houses in places like Monkstown Farm, Sallynoggin, Glasthule , now selling for between £110,000 and £125,000.

The least expensive new homes in Dublin are now in Blanchardstown, with houses in Blanchardstown Heath selling for around £107,000. Many firsttime buyers are travelling as far away as Athboy, Co Meath, Gorey, Co Wexford, and Kinnegad, Co Westmeath, to find a new house for under £100,000. However, it is still possible to buy a modern second-hand three-bed semi in Dublin 15 for about £85,000 - a price not very much higher than in January of this year. Dublin 15 - Blanchardstown, Clonsilla, Mulhuddart - Finglas, Tallaght and to a lesser degree, Lucan, are parts of Dublin where prices did not jump during 1998, and where first-time buyers should still be able to find an affordable home.