According to the property price register at the end of August, the number of property sales for both Galway city and county is showing a dramatic increase year on year. The register gives the exact selling price of properties and so is the most accurate record of actual sales that have taken place.
Some property reports use asking prices as their source, others use prices which properties were 'for sale' at; neither of these give accurate information which can be relied on. As the property price register is only completed when sales are finalised, it could be argued that it lags behind real time selling prices by a few months. However, it is still the only definitive register for actual property sales.
In the past year, there has been a very significant increase of almost 50 per cent in the number of properties sold in the January to July period in Galway city and county, from 732 properties in 2013 to 1,085 properties in 2014.
This has continued a trend apparent over the last number of years, where the number of properties sold has increased considerably year on year.
Fewer than 450 properties were sold in the same period in 2011, showing a dramatic increase of 140 per cent in the three year period 2011 to 2014.
Indeed 100 more properties were sold in the first seven months of this year than in all of 2011.
This trend of increased sales is clear in most areas of the city and county. Just over €160m worth of property sales took place in the January to July 2014 period compared to just over €114m for the same period in 2013.
Full details of properties sold in Galway city this year can be downloaded here: http://goo.gl/ldw3EX
A tale of two cities
Galway city can be divided into two distinct categories, those where prices are increasing and those where prices remain stagnant.
When it comes to the actual change in prices, the situation is very dependent on location, and the sale of a small number of properties can distort the average sales figures for a particular area. For example, the price register shows an actual fall in the average price of a property in Galway City when comparing January to July 2014 vs the same period in 2013. However, on closer examination it is clear that prices are rising in most parts of the city, and the average figures for 2013 are inflated by some particularly high value sales.
Take the Bushypark area of Galway city for example, the register shows only one property sold in this area in the first seven months of this year for a value of approx. €185k. For the same period in 2013, seven properties sold in Bushypark, for an average value of approx €540k. The average price of a property in Galway city in the first seven months of 2013 was €194k, and a total of 277 houses sold in the city in this period. However, if the seven Bushypark houses are excluded, the average price for this period in 2013 drops to €185k.
The average price of a property in Galway city for January to July 2014 was €176k for the over 420 properties sold.
For areas of the city where a minimum of 10 property sales took place, the following were the average property prices: Ballybane €105k, City Centre €188k, Doughiska €118k, Headford Road €153k, Knocknacarra €204k, Newcastle €266k, Rahoon €143k, Renmore €185k, Roscam €212k, Salthill €254k, Taylors Hill €401k and Wellpark €162k.
Of those listed, the city centre, Headford Road, Newcastle and Renmore showed significant increases on the previous year's prices.
Of course, the price of individual properties depends on a large number of factors, and the figures can only give an estimate of what you can expect to pay in certain areas.
For county Galway, over 640 properties sold, at an average price of €133k. This was almost 50% above the number of properties which sold in the same period in 2013, when the average price was just under €130k.
Over the coming weeks, The Galway Advertiser will be publishing more details on the property market throughout county Galway.
LOCAL ESTATE AGENTS PREDICT CONTINUING GROWTH.
Local estate agents are in no doubt that the Galway property market is in for a period of further growth. According to local estate agent, Don Colleran, of Colleran Auctioneers, 'property prices within Galway City Centre, i.e. a five kilometre radius of Eyre Square are up by 25% in most areas over the last 12 months, and in certain parts of Claddagh and Salthill up by as much as 40%, for houses up to €500,000'.
“Galway, fortunately, is a destination City for work, study and holidays so the demand for property is stronger than any other City outside of Dublin and that demand shows no sign of abating anytime soon, particularly with employment once again on the rise and people taking up new jobs in Galway”, added Mr. Colleran.
But is this another bubble, and should the buyer not beware? 'Who knows for certain? is Don's reply? 'Most economists got it wrong last time and some will certainly get it wrong again but the major contributing factor last time was loose credit. We are now in a market fuelled primarily by cash with very little credit currently available. When this cash dries up, and while securing credit remains difficult, the rise in prices will have to slow but will they fall? Some people expect prices to slow or even fall when the banks and NAMA start to release repossessed properties to the market. While this might be the case in some parts of the country, this is where Galway differs once again. How many ghost estates do you know of around the city? How many blocks of apartments do you know of remaining vacant? While a lot of houses were bought for investment in Galway city during the boom and many are now in negative equity, these properties are still rented and going a very long way towards servicing their borrowing and not currently at risk from the banks. Yes, repossessed properties will come to the market, but if they do they will be in such small numbers that they will have little or no negative effect on the market. It's understandably difficult to know who or what report to believe, so when buying a house make sure it meets your long term needs and is in an area you would be proud to call home and you won't go wrong even if prices do fall again,' according to Don.
CALLING ALL SELLERS.
Michael Mullery of Mullery Auctioneers has also seen similar growth: 'In our experience, the residential property market in the city has improved dramatically over the past 12 months with prices and activity levels rising sharply in most areas of the city. There is much more confidence from both investors and owner occupiers. We have sold almost 50% more residential properties in the first 8 months of this year when compared to the same period in 2013 and in many cases at substantially higher prices'.
'We have experience in one particular development where we have sold a large number of identical units over a 24 month period and the price that the most recent unit sold for was 60% higher than the prices achieved two years ago' according to Michael.
'Properties outside Galway city are also selling well but in many cases have not experienced similar levels of price increases'.
Michael says Mullery Auctioneers have a significant number of people including disappointed underbidders looking for properties both as a home and investment and they would be delighted to hear from anyone who is considering selling'.
Patrick Cormican of Winters Property Management agrees there has been a large increase in sales in Galway in 2014 as highlighted in the Galway Advertiser Property Report. 'We feel this is being driven mainly by ‘Buy to Let’ investors who are being heavily influenced by the net return currently achievable in the market, and by Bank Deposit rates'.
WPM which is the largest Property Service Provider in the west of Ireland and provide a full suite of services including sales, management and letting also feel that the increase in sales is down to a renewed confidence in the market along with the general consensus among purchasers that there is value in the market currently and now is a good time to buy. There is also a feeling among people that the market is recovering and people are looking to buy before prices increase further and the Capital Gains tax exemption expires, as seen to a certain extent recently in Dublin.
WPM welcomes the report from the Advertiser and feels it provides a very accurate reflection of market trends as it is based on actual sale prices achieved, as per the Property Price Register. While the Property Price Register lacks certain details that would be useful from size to number of bedrooms, etc it has definitely become beneficial in adding greater transparency to the property market.
WPM are actively seeking additional properties to cater for the demand they are experiencing.
Family homes most sought after
According to Tony Kavanagh of Sherry FitzGerald, the Galway market has enjoyed a buoyant lift in activity over the past 12 months both in sale activity and prices achieved, this has resulted in a significant uplift in prices. The Sherry FitzGerald Index of prices reveals that prices in Galway city and county have increased by over 10 per cent in the past 12 months while the Galway city market has increased by 12.6 per cent in the year to June. Traditional three and four bed family homes are most sought after and as result there are appreciating more rapidly than other property types.
"The numbers of units transacting has increased with city properties showing most demand but things have improved in the county towns as well. Property values reflect the new reality of the market and as a result are encouraging purchasers to come back into the market. Family homes in well serviced areas are proving to be the most popular housing style in the market.
“Most potential purchasers will buy in the best location that their purse will allow and as a result we see the prime well serviced areas continuing to show market growth. We would advise potential purchasers that it is a good time to buy the home you require. The biggest challenge for the Galway market is the shortage of property available for sale. Our latest analysis revealed that as of July this year fewer than 350 residential properties available for sale in Galway city, representing 1.1 per cent of the private housing stock. Such a low supply will inevitably fuel further price inflation in the months ahead.”
The analysis of property prices by Advertiser.ie is based on the Residential Property Price Register produced by the Property Services Regulatory Authority.
It contains details on the sale of all residential properties in Galway. The register does not contain specific detailed information on individual properties.
The register provides information on the price, and address of all properties purchased during the period as declared to the Revenue Commissioners.
In the case of new properties, the prices on the register are shown exclusive of VAT at 13.5 per cent.
Next Week: Oranmore, Athenry and Gort: How is the property market in these county towns really performing?