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  • Lack of stock affecting Dublin sales under €220,000 threshold
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May 21, 2015 - 12:19

Lack of stock affecting Dublin sales under €220,000 threshold

MyHome.ie
By MyHome.ie
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Lack of stock affecting Dublin sales under €220,000 threshold

A lack of stock has led to a decline in the number of properties being sold in Dublin for under the Central Bank’s €220,000 treshold for first-time buyers.

Under the Central Bank rules introduced earlier this year, first-time buyers need just 10 per cent of a deposit for all properties priced €220,000 and under.

However, just under a third (32.8 per cent) of sales in Dublin so far this year have been at or below this level, a fall from last year when two-fifths of sales (40.2 per cent) fell into that category.

In March this year, the first full month after the rules were introduced, just 35.1 per cent of transactions in the capital were at or below €220,000. That is a decline on the same month of 2014 when 47.3 per cent of sales fell into this category.

The decline continued into April, with just 32.5 per cent of sales in the capital at or below the €220,000 mark.

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This continued fall in sales can be directly attributed to stock levels.

Property website MyHome.ie revealed at the end of January that there were just 842 properties for sale in Dublin at or below €220,000.

Despite the number of properties for sale in the capital increasing since then by 42 per cent to more than 5,300, the number for sale under €220,000 has fallen from 22.4 per cent of available stock to just 20.2 per cent.

Angela Keegan, managing director of MyHome.ie, admitted that stock at this level remained a problem.

“Despite stock being at its highest level in Dublin since early 2013, there’s still only a small number coming on the market for under the €220,000 treshold,” she said.

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“The Government needs to address this urgently. While it is difficult to quantify the numbers of first time buyers in Dublin at any given time, it is clear thousands of hard pressed buyers will be competing for just a small number of homes and apartments. This situation is clearly not sustainable.”

Keith Lowe of DNG estate agents said he felt that the Central Bank’s €220 treshold had only served to heighten prices at the lower end of the market.

“We had properties in Bray, for example, which were selling for between €160,000 and €170,000 but are now going for around €200,000 to €210,000.

“These new rules have set a new barrier and it is becoming a pinch point a bit like the old stamp duty rules a few years ago.”

Mr Lowe said banks were still making exceptions when it came to the rules and added that it was much too early to be making predictions as to how the Central Bank’s intervention would affect the market.

“The rules haven’t really kicked in yet as most people are still working off old loan approvals and the banks are still giving exceptions.

“Some people above the €220,000 mark have given up on buying though and have gone back to renting, which is putting pressure on that market at the moment. A few others have had to change their desired location if they want to buy.

“If they were getting a 4.5 multiplier last year and now they are only getting a 3.5 multiplier then their budget will be lower and therefore they will have to look elsewhere for a home.

“Despite that the lower end of the market is quite strong and almost all of our apartment sales in Dublin so far this year have been by owner occupiers whereas last year first-time buyers simply couldn’t compete with the number of investors in the market,” said Keith.

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  • Tags
  • €220
  • 000
  • Angela Keegan
  • Central Bank
  • Central Bank rules
  • deposit
  • DNG
  • Dublin
  • first-time buyer
  • Keith Lowe
  • MyHome.ie
  • stock
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