One of the three houses, all located in Monaleen, that sold for a combined figure of €1.5m and were finalised in the same week
THREE homes in Monaleen sold in the space of a week for a combined figure of €1.5 million — well above the asking prices — the Leader has learned.
The country was gripped by RTE’s Ireland’s Property Crisis programmes and these three sales are a snapshot of what is happening in Limerick.
While reluctant to comment when contacted about the three detached properties - two in Ashleigh Woods and one in the Fairways - Tom Crosse, group property director of GVM Auctioneers, did acknowledge there is “huge demand in the area”.
The houses were only on the market for a short number of weeks before being snapped up.
Mr Crosse said since January they have noticed considerable price increases all across the city and the county.
“Traditionally it may have been confined to the city but we are also now noticing quite a bit of activity out in the rural areas that would have been, heretofore, very quiet. The main issue that auctioneers are finding now is lack of supply. We have a number of bidders per property. In many cases we have bidding wars for want of a better phrase,” said Mr Crosse.
For example, an average 110sqm semi-detached, in one of the suburbs is getting 20 odd viewings, four / five bidders, making €220,000/€230,000, and in a turnaround time of four to six weeks.
“There is big demand. A lot of people who have been renting are finding that rents have increased substantially. They are finding they don’t have security of tenure any more in terms of their tenancies because a lot of landlords are selling up.
“During the downturn many pulled back from the concept of buying and decided to rent long term. Rents recessed down as well and they were quite comfortable to rent and the landlord maintained everything — washing machine, fridge, cooker etc — there was no cost to the tenant.
“A lot of landlords are very frustrated — you have rent controls coming in, taxation and PRSI, so if a landlord is getting €1,000 a month they are only taking away €450 net. Then you pay maintenance, insurance, management charges, washing machine breaks down, occasional troublesome tenants and you have vacancy periods.
“The whole idea of renting being attractive is no longer the case. A lot of properties we are selling is frustrated landlords saying I don’t need this any more. Prices have recovered and they are saying to themselves, “I am getting out of here”. That is shrinking the amount of rented accommodation around town. That is why rents are being compressed upwards so it is a vicious circle,” said Mr Crosse.
And investors aren’t entering the marketplace because the “return isn’t in it”.
However, developers are now looking at Limerick again, said Mr Crosse.
“Limerick is getting to the stage that it is almost economical again to start building in the city. They are saying the threshold is give or take €220,000/€230,000 and we have reached that level for a three bedroom semi,” said Mr Crosse.
Indeed, GVM and Joe Wheeler Auctioneers are the joint agents on a new 44-house luxury development at Templeville, Punch’s Cross.
Builders, Ballymount Properties, Dublin, are expected to be on site this month. It will be a mix of four and five bedroom semi-detached houses.
“There is a good bit of interest already — we are taking names at the moment. We are currently finalising prices. It is a very good location near Mary I, schools and walking distance from town,” said Mr Crosse, who doesn’t think we are at the “bubble stage”.
“House prices around the country are about five and a half or six times the average salary which economists say is sustainable. During the boom it was eight and a half times which was unsustainable — that is what created the bubble.
“At the moment we are reasonably comfortable in that respect.
“Residential property in Limerick probably dropped 50% in the downturn. Prices are probably back to 75% / 80% of where they were at peak. A house that made €300,000 in the boom fell to €150,000 — that is now back to €230,000 / €240,000. There is still a bit to go. The pace of the recovery — I wouldn’t say startling — but it is surprisingly quick.
“They are expecting double digit growth this year which would see prices in Limerick rise by 15% which is quite a substantial lift in values,” he concluded.