Monday 21 December 2015

Reversal of Fortunes for Tallaght Q4 2015

The issues being experienced in Dublin’s typical average first-time buyer area, Tallaght, have typified the flux currently being experienced in the market.

Average three-bed semi prices in Tallaght and its environs have fallen by €10,000 (-4.55%) in the last three months, with three-bed semis now making €210,000.

“There are a number of major factors influencing the market in Tallaght, and throughout similar areas of South Dublin,” said local agent Anthony McGee of REA McGee.  

“Constantly increasing rents have made it almost impossible for first-time buyers to save the deposit required.

“An average couple who are paying €1,400 a month to rent a two bed apartment in Tallaght, running an car and paying for childcare, cannot afford to save upwards of €20,000 for a deposit.

“And what is so frustrating for them is that what they are paying in rent exceeds the cost of a mortgage in the same property.

“This is a huge first-time buyer market where people would traditionally rent for three or four years before buying.

“However, we now see people renting for 10 years because they will never be able to save the deposit.

“We have notice a trend recently whereby foreign nationals with good jobs have been leaving rented accommodation to return home purely because they cannot afford the rent and can never see themselves owning a house.

“House prices have fallen because there is a lack of suitable properties coming on stream and there isn’t a huge amount of people viewing or bidding as they are stuck in this rental mess.

“People have a limit and they will walk away rather than go above that number.

“The fact that loan offers are only lasting three months is proving to be very frustrating to buyers in an era of low supply.

“People getting lost in a maze of loan approval, which has to restart after three months.

“The rental market is contracting at a rate of knots as every house that we sell is now being bought by an owner-occupier.

“There are no new investors in the lower of the market. You can achieve double-digit yields if finance is available, but the banks are not lending to them
“A lot of existing landlords, who would see the potential in these yields, are in negative equity and will not get finance.”