Tenants whose landlords are selling up are routinely paying €30,000 over guide price in a race to secure properties in Dublin before their leases expire, the Q2 REA Average House Price Index has found. The number of sales in the capital due to landlords leaving the market has risen six points to 25pc in the past three months, the Index revealed. As buying is cheaper than renting in most cases, it is now an option for many departing tenants who are finding it easier to secure mortgages because of their repayment history.
However, they are paying an average of €30,000 more than asking price to secure properties before time runs out on their leases, according to REA agents. The REA Average House Price Index concentrates on the sale price of Ireland’s typical stock home, the three-bed semi, giving an accurate picture of the second-hand property market in towns and cities countrywide. The actual selling price of a three-bed, semi-detached house across the country rose by 2.3pc in the past three months to €315,352.
Prices in Dublin city rose by 1.6pc in the last three months, meaning that the average three-bed semi in the capital is now selling at €525,500 – an increase of 5.1pc in the last year. Agents REA McGee in Tallaght and Rathfarnham report that properties are routinely exceeding their value by €30,000 in the band between €250,000 and €350,000. “Properties guiding at €320,000 are routinely selling for €350,000 simply because the buyer is under time pressure due to a notice to quit,” said Anthony McGee. “If they are forced into the market, they are maxing out their loan approval to secure somewhere to live within their timeframe.”
A feature of the market is that many houses coming to the market are ex-rental stock, needing upgrading, according to REA spokesperson Seamus Carthy. “While we are seeing a slight improvement in stock, a lot of what is coming on the market in the capital needs substantial refurbishment,” he said. “Those intending to purchase a doer-upper are subject to different lending rules and their bank may look for proof that there are sufficient funds in place to renovate. “There are huge issues sourcing people to do extensive repairs where multiple people are required. “As a result of this, people looking to trade up are opting for smaller extension work in their existing properties where it is easier to source labour.”
