scsi_residentialpropertyreview_2014

Annual
Residential
Property Review
& Outlook
2014

iv • SCSI Annual Residential Property Review & Outlook 2014

SCSI Annual Residential Property Review & Outlook 2014 • 1
Contents
1. Introduction 2
2. Key Results Summary 4
3. Key Opportunities & Challenges Summary 6
4. Outlook 2014 Summary 7
5 Key Opportunities & Challenges Affecting the Property Market 9
5.1 Consumer Confidence 10
5.2 Demand versus Supply 12
5.3 Availability of Finance 18
6. Residential Property Market Activity and Values 21
6.1 Estimated Average Sales Prices for Residential Properties 24
6.2 Residential Rental Market 26
6.3 Residential Investment Market 28
7. Interviews with SCSI Chairs 29
7.1 Dublin 30
7.2 Leinster 31
7.3 Munster 32
7.4 Connaught/Ulster 32

2 • SCSI Annual Residential Property Review & Outlook 2014
Given the country’s pre-occupation with all aspects of
the housing market, there is no shortage of reports, data,
commentary and analysis on the sector. None are as
insightful as the opinions of those at the coal-face. This is
the value of the annual residential property survey from
the SCSI. Not only does the survey provide evidence
on the movement in the market over the past twelve
months, it gives expert opinions on the reasons for these
developments, as well as identifying some of the issues that
need to be addressed from a policy point of view.
What does the latest survey of SCSI members tell us
about the residential property market? While it is difficult
to identify a simple narrative from the survey responses,
the one clear conclusion is that 2013 can go down as the
year of recovery in residential property prices. While the
recovery in the Dublin market has been broadly recognised
for some time, the SCSI survey suggests that prices grew
in all regions and in almost all categories in 2013. The main
differences lie in the scale of the recovery in the market.
It could be said the market is in the midst of a credit-less
recovery, with the survey revealing that roughly half
of transactions in 2013 occurred without the use of a
mortgage, with cash being particularly prevalent in the
Leinster region. One interpretation of this phenomenon is
that banks have not been providing credit at reasonable
terms and conditions, thus leading to a situation whereby
the number of mortgages issued in the country is still at
levels last seen in the early 1970s. Another interpretation
is that the banks are approving loans, but this credit is not
being drawn down. There is reason to believe that cash
buyers are being prioritised over mortgage buyers by
sellers, thus contributing to the very low levels of
mortgage drawdowns.
The debate on the supply of credit versus the demand for it
will rumble on, but one important finding of the survey, and
one that provides some room for optimism in 2014, is that
professionals are saying that mortgage finance became
more available in 2013. Although not consistent across the
country, some respondents cited evidence of more active
engagement by the banks on lending, although the credit
standards that must be met are unsurprisingly much tighter
than prior to the bust.
If credit was not the trigger for the market recovery in 2013,
what has been? Confidence has undoubtedly been key. It
is interesting to note that respondents believe that positive
media reports played a big role, but the media can only
report more positive news if there is more positive news to
report! The surprisingly strong rebound in employment, as
well as the successful return of confidence in Ireland Inc.
undoubtedly contributed here.
The key issue for the market in 2014 is supply, both of
new builds and of properties on the market. To some
degree, the market will help resolve this problem. Higher
prices will increase the incentive for developers and it will
encourage mover-purchasers as those homeowners climb
out of negative equity and find the confidence to move.
But it would be naive to think that the market will cure
all the market’s ills. On the development side, the survey
suggests that while development financing is available, a
35%-40% equity gap is an issue. One cannot and should
not expect banks to finance speculative development with
only a small equity buffer. Given the amount of interest in
investment into Ireland, the industry should try to tap into
this potential, rather than purely relying on old-fashioned
debt financed development.
The survey suggests that negative equity and tracker
mortgages are a barrier to liquidity. Rising prices will
change this but only gradually. Some products have been
made available for tracker mortgage holders and those
in negative equity to move, but more should be done to
facilitate those people, thus benefiting the market overall.
Property market cycles are a feature of almost all
developed economies across history. In this regard, Ireland
is no different. The only difference with the cycle over the
past decade was its scale. It is our belief that the property
market has entered a new cycle. This is undoubtedly a
positive for the property industry, the banks and the wider
economy. One must remember though that prices in Ireland
cannot be described as “cheap” in general. It is best to
avoid a repeat of the past decade. To do so, increasing
confidence, an improving labour market and a growing
economy must be accompanied by the right policy choices
around financing, development and planning.
Dermot O’Leary is chief economist with
Goodbody Stockbrokers
1: Introduction
Dermot O’Leary
Chief Economist, Goodbody Stockbrokers

The latest survey of SCSI members shows improvements
in activity levels across the country, although the picture
varies considerably by location. Over 8 in 10 chartered
surveyors said that the volume of sales activity increased
in 2013, particularly in Dublin where there has been an
increase in property values of around 15.7%. It should be
noted, however, that the changes in values are coming from
a very low base and are highly localised.
91% of chartered surveyors who responded reported that
there has been an increase in the residential investment
sector from buy to let landlords/investors and identified
an increasing trend of international investors purchasing
blocks of residential units, also known as multifamily
investments, particularly in Dublin. Increases in rents,
improvements in yields and the extension of the Capital
Gains Tax relief in Budget 2014 were cited as key drivers
of further investment in this sector although the costs and
charges associated with residential investment remained
an issue.
The upturn in activity is good news for the property
market, buoyed up by confidence in the wider economy.
Employment levels have stabalised, inward investment
has increased and growth prospects for the economy are
expected to improve moderately throughout 2014.
There are a number of challenges facing the market
including a lack of supply of family homes due to very
low levels of construction over the past 5 years, a lack
of mobility among homeowners who may wish to trade
up/down due to negative equity and the availability of
mortgage finance and products for people on tracker
mortgages enabling them to move, to name but a few.
The Irish construction sector is operating at around 6% of
GNP, half of what it should be for an economy the size of
Ireland which is causing capacity constraints.
In Dublin, over 55% of respondents stated that a lack of
supply will be a key factor affecting the property market.
The availability of development finance to the construction
sector and the economic viability of building residential
family homes, which according to respondents of the survey,
is what many prospective purchasers want, must improve in
order for house building volumes to increase again.
Simon Stokes
SCSI Residential
Professional Group Chair
According to the ESRI, we will need approximately 20,000
– 25,000 units per annum for 2016 onwards. In 2013, 7,500
units were built (January to November), a large proportion
of which was once off housing.
SCSI members surveyed pointed to possible solutions
to some of the current issues affecting the market:
» Consideration should be given to existing planning
and density requirements as the demand is largely for
family homes and not apartments per se
» Measures should be introduced to ensure existing stock
held by NAMA and the banks is released onto
the market
» Supply of mortgage finance should be increased in
a measured and rigorous way to assist people who
meet the requirements to get a mortgage but credit
provisions should be closely monitored to
avoid overlending
» Mortgage decisions should be quicker and
provisional mortgage approvals should be
standardised to 6 months
» Increase supply of Development Finance in
a controlled and measured way through
alternative sources
» Review planning costs and development levies
to facilitate development in areas where there
are supply deficits
The outlook for the property market in 2014 according to
survey respondents varies significantly by region as you
would expect. In Dublin, prices are expected to continue to
increase moderately unless solutions to the supply issue are
found quickly. Rental prices are also expected to increase
as the residential investment market continues to improve.
The expectations outside of Dublin and the regional cities,
however, are far more subdued and are likely to take some
time to fully stabalise.
Simon Stokes, Residential Professional Group Chair,
Society of Chartered Surveyors Ireland
Signs of an urban-led
stabalisation in property
prices but regional
outlook more uncertain

2: Key Results Summary
MARKET ACTIVITY IS UP
8 in 10 Chartered Surveyors said that volume
of Residential Sales have increased
SHORTAGE
OF SUPPLY
of Chartered Surveyors surveyed
in Dublin said a lack of supply
is a key issue
FINANCE
PRICES HAVE
TURNED
A CORNER
INVESTMENT
Around half of all
residential property
transactions
are being
made in cash
55%
RENTAL
PROPERTIES
Average Sales Price change
» Dublin +15.7%
» Outside Dublin +5.7%
Increased
interest in
Dublin’s
residential
property market
from investors
Average Residential Rentals
» Dublin €1,290
» Outside Dublin €613
89% of Chartered Surveyors expect rental price increases in 2014

Market Activity is Up
» Over 8 in 10 chartered surveyors said that the
Volume of Sales have increased, particularly in
Dublin (92%) in 2013
» 75% of chartered surveyors in Dublin said that Sales
Instructions from Vendors have increased during
2013 versus 50% outside Dublin
» Over two thirds of chartered surveyors said
that Sales Instructions from Receivers/Banks
have increased
Shortage of Supply
» 55% of chartered surveyors surveyed in Dublin said a
lack of supply and increased demand were the most
significant issues that will affect the market
» Almost two thirds of chartered surveyors said that
Residential Stock for Sale has remained the same or
decreased and this is a key concern in the market
» In 2013 (January to November) around 7,500 new
houses were built nationwide versus 93,419 in 20061.
» Just over 1,000 new houses were built in Dublin
» Negative equity and a lack of mortgage finance are
hampering release of existing stock
Residential Property Prices
have turned a corner
» Increased demand and a shortage of supply are
having an impact on residential property prices,
particularly in Dublin
» Estimated Average Sales Price2 change
• Dublin +15.7%
• Outside Dublin +5.7%
» Urban driven stabalisation and increase in prices
but coming from a very low base and low levels
of transactions in the market.
Composition of Finance is Changing
» Around half of all residential property transactions are
being made in cash although this is starting to reduce
» 7 in 10 chartered surveyors in Dublin see an increase
in the availability of mortgage finance versus 5 in 10
outside Dublin which is key to the market
Rental Properties
» Average residential rentals in Dublin (€1,290) are twice
those outside Dublin (€613)
» The PRTB/ESRI Rent Index indicates that residential
rental prices in Dublin are increasing
» There is a lack of supply of quality rental property
coming onto the market. Nine in ten chartered
surveyors expect the supply of 3 and 4 bed
semi-detached houses for rental in Dublin to either
remain the same or decrease
» 89% of chartered surveyors surveyed expect the
rental price of 3 bedroom semi-detached houses
to increase in 2014
“The residential rental market is a bigger factor
now. The population base is changing and some
people have no desire to purchase. The major rental
websites of Daft.ie and Myhome.ie are showing
that the number of properties available for rent has
reduced over the year and rents have increased.”
Ray Hanley, SCSI Valuations Professional
Group Chair
Changes in Residential Investment
» 9 in 10 chartered surveyors in Dublin have seen
increased investment in the residential market in
comparison to 36% in Connaught/Ulster
» Large multi-unit investors are more active in Dublin
(23%) versus outside Dublin (14%)
1 Source: Department of the Environment, Community & Local Government
2 Source: SCSI Survey of Members, Dec 2013

3: Key Opportunities & Challenges
Affecting the Property
Market Summary
CONSUMER
CONFIDENCE
Economic Growth
Consumer Demand
Improving Sentiment
Positive Media Reports
Cash Buyers
Mortgage drawdowns increasing
But diculties accessing mortgage
finance still exist
People in bad debt/negative equity
unable to get mortgage finance
Construction finance critical for supply
Need for greater monitoring of
credit provision
DEMAND
VERSUS SUPPLY
AVAILABILITY
OF FINANCE
Around 1,000 new houses built in
Dublin in 2013
Around 8,000 new houses are needed
in Dublin per year
Chartered Surveyors do not expect
supply to increase
Prices stabilising/increasing
Planning permission/zoning
Supply of repossessed properties
from NAMA/Banks
OPPORTUNITIES
TO MEET DEMAND
Changes to planning permission/zoning in
urban areas
Increased availability of construction/
development finance
Increased availability of mortgage finance
Banks to increase awareness of mortgage
products for those in negative equity to
release existing stock
Viability of
construction costs
€

SCSI Annual Residential Property Review Outlook 2014 • 7
4:
Outlook 2014 Summary
» In 2014, Ireland’s economy is poised for growth with
consumer demand, trade and investment driving
growth in the year ahead. Additionally, consumer
confidence is at its highest level since the economic
crisis hit.
» This bodes well for the property market as
improvements in consumer sentiment are likely to
lead to increased demand for property.
6.1:
Overview
» Residential property prices have already started to
increase and chartered surveyors expect this trend to
continue into 2014.
» While 70% of respondents expect prices of second
hand homes in Dublin to increase, the outlook for
property values around the rest of the country
remains more subdued
» In Dublin, over 55% of respondents stated that a
lack of supply will be a key factor affecting the
property market
» Outside Dublin, chartered surveyors anticipate
that the availability of mortgage finance and
increased consumer confidence will be the main
drivers of demand. They also predict that First Time
Buyers will be the main source of demand, while in
Munster, movers e.g. those trading up or down, are
also expected to be key.
» Buy to Let investment is expected to be weak in
the regions.
» The ESRI estimates that 10,000 to 12,000 new homes
are needed nationwide per year up to 2015 and
20,000-25,000 from 2016 onwards. Others predict
that 8,000 new homes are needed in Dublin alone in
2014. Less than 1,500 new homes were built in
Dublin in 2013.
» A significant cohort of chartered surveyors do not
expect the supply of residential properties in Dublin
to increase over the next 12 months, particularly
family homes e.g. 56% expect the supply of 3 and 4
bedroom second hand homes to decrease or stay the
same in 2014
» The vast majority of chartered surveyors do not
anticipate an increase in supply in the residential
rental market in Dublin over the next 12 months.
» Chartered surveyors also expect rental prices to
increase over the next 12 months, mainly due to
increased demand and a lack of supply.
» There is some evidence that competitive bidding is
taking place in Dublin. However, there are fears that
this could increase further unless something is done
to increase the supply of residential property in order
to meet demand.
» Respondents to the survey recommend that the
current planning permission for high density
apartments be re-designated to family homes such
as three and four bed semi-detached houses and 4/5
bed detached houses, to accommodate demand. 6.2:
Urban Homes

8 • SCSI Annual Residential Property Review Outlook 2014
» They also feel that negative equity is hampering
mobility and hampering the release of existing stock
onto the market. There is a call for banks to start
addressing this by increasing awareness of mortgage
products for those who are in this negative equity
situation and want to move.
» There are mixed views on the impact that NAMA and
the banks will have by releasing residential properties
onto the market. Some chartered surveyors feel that
an aggressive approach will depress prices while
others anticipate that any release of NAMA/bank
properties will not be sufficient enough to have any
impact on the market.
» Greater mortgage availability is also felt to be key to
increasing demand for property. There is evidence
that the availability of mortgage finance is starting to
increase, however there are concerns that mortgages
will only be available to those with the most
secure jobs.
» There are also calls for robust measures to encourage
the building industry to start building this new supply
of homes. The increased availability of development
finance as well as increasing this from the current
threshold of 50% to 60% are felt to be critical to kick-starting
the construction of new homes.
» Additionally, it is felt that ways to reduce
development costs in certain urban areas need to
be considered to help increase the supply of
residential properties i.e. development levies.
» However, any increase in the availability of mortgage
finance and development finance needs to be closely
monitored as there are fears that the market could
overheat and spiral out of control if there is too
much lending.
“The market will continue to grow and prices will
increase, as the economy fixes itself, people will
engage more positively in the market but we need
to ensure that the market does not get out of hand.
It’s a delicate balancing act. We can quickly go the
other way if there is overlending” Kieran McQuinn4
4 Any comments from Kieran McQuinn are made on a personal basis rather than as a representative of the Central Bank.

5:
Key Opportunities
Challenges
Aecting the
Property
Market

5: Key Opportunities Challenges
Affecting the Property Market
2013 represented a turning point for the property market.
Sentiment levels have improved among home owners
and prospective purchasers and this has translated into
higher levels of activity and values, particularly in Dublin
and other regional cities. The picture in the regional areas,
however, remains more subdued.
Improvements in economic growth, a stabilisation
of unemployment levels and the exiting of the EU/
IMF bailout have resulted in increased confidence and
demand both domestically among prospective purchasers
as well as from international investors looking at the Irish
property market.
However, a number of challenges remain on the horizon
before a properly functioning property market can be
realised. These challenges range from a shortage of
supply of new builds to a shortage of existing stock with
sellers adopting a ‘wait and see’ approach and negative
equity and difficulties accessing mortgage finance
hampering mobility. There is also uncertainty around
the impact of mortgage arrears, repossessions and debt
restructuring on the market.
This section of the report addresses some of the key
opportunities and challenges affecting the market.
5.1: Consumer Confidence
Ireland’s exit from the bailout has boosted consumer
confidence about Ireland’s economic performance
and prospects: for the third month in a row Amárach
Research’s Economic Recovery Index has reached a
record high level – up to 31.2. The improvements in
consumer intentions for spending and borrowing noted in
November 2013 have been sustained into December 2013.
Amárach Research’s tracking research (and qualitative
research) confirm a growing anticipation of recovery
and a better alignment between people’s views on the
economy and their own personal financial plans.
Of course, sentiment is just that – an emotional reaction
to changing circumstances and information: 2014 will
show us whether the hoped for recovery can finally
become reality.
This improvement in consumer confidence is supported
by the ESRI’s latest quarterly economic commentary5
which states that the Irish economy appears to have
turned a corner as domestic demand has increased by
0.9% in 2013, the first increase since the crisis began.
» Using the answers to the question on ‘stages of recovery’ we have created the Economic
Recovery Index, which ranges from 0 to 100 (0 = deep recession; 100 = back to peak).
» Our Index continues to improve: reaching 31.2 in December 2013,
the third record breaking performance in row:
2009
April
2010
January
2012
January
2013
January
2013
December
» The Economic Recovery Index
35
30
25
20
15
10
5
0
Source: Amárach Research, December 2013
2011
January
Source: Amárach Research, December 2013

» ESRI December 2013
Output (Real Annual Growth %) 2010 2011 2012 2013 2014
Private Consumer Expenditure 0.9 -1.6 -0.3 -0.3 1.5
Public Net Expenditure -6.9 -2.8 -3.7 0.3 -1.3
Investment -22.6 -9.5 -1.0 2.1 4.5
Exports 6.4 5.4 1.6 0.3 4.6
Imports 3.6 -0.4 0.0 0.9 3.9
Gross Domestic Product (GDP) -1.1 2.2 0.2 0.3 2.7
Gross National Product (GNP) 0.5 -1.6 1.8 2.0 2.7
5 ESRI Quarterly Economic Commentary, Winter 2013
The ESRI says that Ireland’s economy will experience
relatively balanced growth in 2014, with consumer
spending, trade and investment driving growth in the
year ahead. Only public expenditure is expected to
contract further.
The SCSI survey of members also reflects this optimism
as chartered surveyors feel that an improvement in
sentiment has led to increased activity in the market,
as well as a perception that the market has stabilised
in some areas.
There has also been a stablisation in employment levels
and this has given people more confidence and certainty
to consider purchasing their own home.
“An increase in the number of loan approved house
hunters with the ability to draw down mortgages
combined with a decrease in the supply of desirable
properties is leading to competitive bidding and an
increase in consumer confidence in relation to house
prices” Chartered Surveyor, Dublin
“Improved sentiment and expectation that market is
at the bottom” Chartered Surveyor, Munster
“The more activity buyers see on the ground
the more it encourages them to buy” Chartered
Surveyor, Leinster
Chartered surveyors also believe that there is a pent-up
demand for property from people who have been renting
for the past number of years who were taking a ‘wait and
see’ approach to the market and whether property prices
would continue to fall.
In a recent SCSI/Red C survey of renters, almost one fifth
of renters say that they are likely to buy in the next year,
up from 12% in 2012. Furthermore, one in eight of all non-homeowners,
currently renting or living at home, say they
are likely to buy a home in the next year.
Furthermore, there has been interest from people with
investments/pensions that matured over the last 5 years
as well as cash buyers from abroad who now take a view
that there is value in the market.
“General feeling of optimism not experienced
for last 5/6 years. Huge volume of incoming cash
buyers from abroad. Huge pent up demand from
owner occupiers who had cash from sales back 5/6
years ago and who have since been renting / from
people who had various investments / pensions
which matured during the past 5/6 years and who
left the funds sitting rather than invest in property
coupled with somewhat greater availability of bank
finance. Additionally as the bank interest rates are at
an all-time low, and returns of 5-8% on average can
be achieved from property it makes more sense”
Chartered Surveyor, Dublin
“Clear indication that prices have stabilised bringing
buyers who had deferred purchase back into the
market with some zeal” Chartered Surveyor, Dublin
Increases in consumer confidence is positive news for the
property sector. However, it is largely reliant on stability
in the wider economy and Eurozone and any upsets
there could have a knock-on negative impact on the
property market.
» Likelihood to Buy a Property in
Next 12 Months
12%
18%
2012 2013 2012 2013
Renters
10%
13%
Non Home Owners
Source: SCSI/Red C Nov 2013.
Source: ESRI Quarterly
Economic Commentary
Winter 2013

5.2: Demand versus Supply
Demand Challenges
According to the CSO, Dublin’s population is set to spiral
between 2016 and 2031. It is projected to increase by
between 96,000 and 286,000, indicating a growth rate
of 20,000 a year through a combination of births and
people migrating from other parts of the country. The
ESRI6 estimates that around 10,000 – 12,000 new houses
are needed per year up to 2015 and that between 20,000
to 25,000 new houses are needed per year from 2016
onwards if the ongoing demographic change in Ireland is
to be accommodated.
“Demographics are key to the economy. Continued
increases in population and job creation in the
greater Dublin area leads to demand for new
homes” Hubert Fitzpatrick, Director of Housing
Planning Policy, CIF
This is supported by Ronan Lyons in the Daft.ie House
Price Report7 where he states that around 8,000 new
units are needed in Dublin each year into the
medium term.
This will not just put pressure on housing supply but it will
also put pressure on city services such as roads, sewerage
and water supply. There are already some concerns
about the capacity of Dublin’s infrastructure to handle an
increase in housing supply and all of these issues need to
be considered in terms of their impact.
“Water is a huge problem in Dublin, and the
problem is totally underestimated’ Hubert
Fitzpatrick Director of Housing Planning
Policy, CIF
Factors that will Impact Demand
SCSI members were asked about the main factors that
will have a significant impact on demand in the residential
property market. The results vary by region and support
the emerging multi-speed market which is in evidence
across the country.
In Dublin, over 55% of respondents stated that a lack of
supply will be a key factor affecting the property market.
“Lack of stock has created an increase in bidding
and prices being achieved” Chartered Surveyor,
Dublin
“The lack of available stock though is creating
issues with availability and driving prices up, where
most properties in our region are starting to see
competitive bidding scenarios again - which is
becoming alarming as it makes you wonder how
sustainable this is and are we back where we were
pre bust” Chartered Surveyor, Dublin
“A decrease in the supply of desirable properties is
leading to competitive bidding” Chartered Surveyor,
Dublin
» Factors that will have a Significant Impact on Demand in the Residential Property Market
6 ESRI Medium Term Review
7 Daft.ie House Price Report 2013 Q4
Dublin Rest of Leinster Munster Connaught / Ulster
Lack of supply / Increased demand 55% 27% 15% 24%
Better consumer confidence and sentiment
in property market
36% 33% 34% 0%
Increase in prices 20% 4% 11% 0%
Availability of finance / Bank Lending again 20% 17% 36% 8%
Investor and cash buyers entering the
12% 4% 4% 8%
market again
CGT exemption 6% 7% 4% 0%
High tax rates / property tax 4% 1% 4% 8%
Lack of mortgage finance still a threat 4% 20% 9% 12%
Increase positive media 3% 6% 9% 0%
Source: SCSI Survey of Members, Dec 2013.

In Dublin, this lack of supply is already putting pressure
on prices, with competitive bidding in evidence.
In the regions, we can see that the supply issue is not as
pronounced and it is likely that there is still oversupply in
certain regional areas. In Leinster 27% of respondents said
that a lack of supply will be an issue, 15% in Munster and
24% in Connaught/Ulster.
The importance of better confidence and sentiment in the
property market was broadly recognised as a key factor
in the market with 36% of respondents in Dublin, 33% in
Leinster and 34% in Munster agreeing.
The availability of finance was also reported as a key
issue, particularly in Munster with 36% of respondents
stating it will affect the market, along with 20% in Dublin
and 17% in Leinster. Just 8% in Connaught/Ulster felt it
would significantly impact the market.
One fifth of chartered surveyors in Leinster say that the
lack of mortgage finance is an actual threat to demand.
Demand Outside Dublin
Outside Dublin, the SCSI survey of members reveals that
chartered surveyors expect that demand for residential
property will be strong amongst first time buyers (FTB’s)
albeit this is likely to be primarily in the urban areas
close to places of employment and good transport
infrastructure Additionally in Munster, movers e.g. those
trading up or down, are also expected to stimulate
demand. A higher proportion of chartered surveyors in
all regions are more likely to say that Buy to Let/investor
demand will be weak rather than strong over next 12
months. Demand for holiday homes is also expected to
be relatively weak in all regions.
Chartered surveyors outside Dublin anticipate that the
main demand for residential property will be in urban
centres such as Cork, Limerick and Galway, and that
oversupply will still be an issue in rural areas.
“Urban properties have increased in value while
rural remains challenged” Chartered Surveyor,
Leinster
» Expected Demand in Residential Market
Weakest Strongest
1 2 4 5 Mean Score 3
3.3 12
0 10
3.3 6
2.9 38
3.7 18
2.7 38
2.8 37
2.7 42
3.1 36
2.2 6
2 21
2.5 7
2.7 7
2.7 14
2.4 8
3.6 11
19
17
16
10
25
17
13
39
50
47
39
Rest of Leinster
Munster
27
Connaught / Ulster
11
22
25
15
3 15
19
17
26
36
33
18
10
7
11
42
21 33
22 43
22 33
15 13
45 20
26 2
19
11 8
14 14
15 6
33 7
11 25
8 15
22 11 44
First Time Buyer
Mover
Buy to Let
/ Investor
Holiday Home
Other

“There is an imbalance in the region between supply
and demand and a further softening of prices is
needed. While CSO data shows that prices have
stabilised throughout the country, they have not
bottomed out in parts of Connaught/Ulster and they
won’t until next year” Gerard O’ Toole, SCSI Chair
Western Regional Branch Chair
“Activity is up in Munster in the last 12 months, but a
lot of this is focused in the urban areas of Cork and
Limerick” Trevor McCarthy, SCSI Rural Professional
Group Chair – Munster Region
Supply Challenges
The latest figures from the Department of the
Environment, Community Local Government indicate
that 7,425 housing completions were recorded up to
November 2013. This is a 3% decline compared to the
same period in 2012. Dublin only accounted for 16% of
housing completions (1,179). On the other hand, while
3,709 commencement notices were recorded for the
first 10 months of 2013, this represents a 9% increase for
the same time period in 2012. House commencements
increased significantly in Dublin (959 in 2013 vs 562 in
2012). Furthermore new house registrations have more
than doubled in the last year (1,217 vs 602 in 2012),
though they are still well below the registrations recorded
in 2006 (63,552)8 which represents a 98% decrease.
However, CSO planning permission data shows a decrease
in planning permissions granted in the third quarter of
2013 with a decrease of 14% on an annual basis. Planning
permissions were granted for a total of 1,409 dwellings in
the second quarter (1,252 houses and 157 apartments).
With such a low level of new homes being built, the main
source of housing supply is existing stock for sale.
The latest Sherry Fitzgerald report9 on the residential
market indicates that 46,200 residential properties
nationwide were for sale in 2013, 4,500 of which were in
Dublin. This represents 2.5% of estimated private housing
stock. International standards indicate that a market
availability rate of approximately 6% is needed
to represent equilibrium.
» Housing Completions
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013*
100,000
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
*(Q1-Q3)
Source: Department of Enviroment, Community Local Government
8 Source: Department of the Environment, Community Local Government
9 Sherry Fitzgerald, Irish Residential Market, Q3 2013

» Expectations of Supply of SECOND HAND Urban Homes — Dublin
61% 60% 54% 51% 56% 72% 78%
2 Bed
Townhouse
3 Bed
Townhouse
3 Bed
Semi
Increase Remain Same Decrease
4 Bed
Semi
35% 35%
34%
35%
32%
23%
18%
4/5 Bed
Detached
1 Bed
Apartment
2 Bed
Apartment
11% 14% 12%
4% 5% 5% 4%
» Expectations of Supply of New Urban Homes — Dublin
48% 63% 60% 55% 43% 37% 37%
2 Bed
Townhouse
3 Bed
Townhouse
3 Bed
Semi
4 Bed
Semi
4/5 Bed
Detached
1 Bed
Apartment
2 Bed
Apartment
43%
30% 33%
41%
50%
42% 42%
21% 21%
9% 7% 7% 5% 7%
» Supply of SECOND HAND Rural Homes — Dublin
37%
58%
32%
58%
44% 44%
50% 50%
50%
50%
41%
53%
44%
50%
Supply – Expectations and
Opportunities
One of the major issues according to respondents of the
survey was a lack of supply, particularly in urban areas.
In the SCSI survey of members, chartered surveyors were
asked for their predictions on the supply of second hand
residential properties in Dublin and whether this would
increase or decrease over the next 12 months.
There appears to be different expectations around the
supply of semi-detached and detached houses and the
supply of apartments/townhouses. Half of chartered
surveyors do not expect the supply of 4 bed semi-detached
second hand urban houses to increase over the
next 12 months and around two fifths do not expect the
supply of 3 bed semi-detached houses or
4/5 bed detached houses to increase. On the other hand,
chartered surveyors were much more positive about
the supply of 1 bed apartments and 2 bed apartments
as around three quarters expect the supply of these
properties to increase. Six in ten expect that supply of
2 bed and 3 bed townhouses will increase.
As prices are expected to increase, it is likely that more
vendors / landlords who have been holding off selling
and renting their properties will start to bring them on
to the the market.
“More supply is required in urban centres, family
homes are required as there is a cohort trapped in
apartments” John McCartney, Director of Research,
Savills

2 Bed
Townhouse
3 Bed
Townhouse
3 Bed
Semi
» Supply of SECOND HAND Rural Homes — Dublin
2 Bed
Townhouse
3 Bed
Townhouse
3 Bed
Semi
Chartered surveyors were also downbeat about expected
supply of second hand rural properties in Dublin e.g.
properties on the outskirts of county Dublin. Over half of
chartered surveyors do not expect the supply
of these properties to increase over the next 12 months.
Around two thirds of chartered surveyors do not expect
the supply of new rural homes in Dublin e.g. new one off
properties on the outskirts of county Dublin, to increase.
With low expectations on the supply side, it is not
surprising that the majority of chartered surveyors expect
that the price of these homes to increase.
Expert Views on Supply Solutions
Planning
SCSI members and other stakeholders were asked to
give their views on possible solutions to the supply issue
affecting the market.
A number of experts mention changes to planning/zoning
as one of the main solutions to increasing supply. It has
been suggested that more property and land could be
made available if there were changes to planning policy
around density.
Planning has been granted/exists for high density
apartments in certain areas around Dublin but demand
is currently for 3 and 4 bed semi-detached family homes
of which there are constraints on supply and which is
putting more pressure on prices on the limited second
hand stock of family homes that do become available.
“In the Residential market many of the sites which
have the benefit of planning permission are for
high density schemes while demand is for lower
density housing. Having sufficient zoned land with
appropriate planning for houses in Dublin is an
issue as the lack of supply of traditional houses
has resulted in significant increases in prices in
the Dublin market” Ray Hanley, SCSI Valuations
» Expectations of New Rural Homes — Dublin
72%
24%
4%
Supply Prices
36%
45%
18%
4 Bed
Semi
4/5 Bed
Detached
1 Bed
Apartment
2 Bed
Apartment
9% 7% 7% 5% 7%
4 Bed
Semi
4/5 Bed
Detached
1 Bed
Apartment
2 Bed
Apartment
37%
58%
32%
58%
44% 44%
50% 50%
50%
50%
41%
53%
44%
50%
5% 10% 6% 6% 6% 6%

“Local authorities need to explain and review their
attitudes to density. It is a legacy of the boom times
and not what the market is looking for”
John McCartney, Director of Research, Savills
“Some local authorities remain too firmly fixed
on high density residential development, even in
less central locations. Demographic changes – in
particular a sharp decline in the number of people
in their 20s - mean that the natural demand for
apartments outside the city centre and locations
close to good public transport links has diminished”
There is also a concern that the current planning policy
around density is impeding supply as there is no incentive
for the industry to respond.
“Pent up demand is driving prices in the Greater
Dublin Area but industry cannot respond in many
cases because of planning policy seeking higher
density. The current cost of construction remains
ahead of attainable market value when completed,
so the project can’t be banked” Hubert Fitzpatrick,
Hubert Fitzpatrick, Director of Housing Planning
Policy, CIF
“The high cost of constructing apartments, make
it difficult for developers to break-even on high
density schemes in many locations. Ultimately, this
curtails much needed new construction”
Release of Existing Stock
The lack of mobility is a key issue in the market at
present and this is mainly due to people who are in
negative equity and are not in a position to move or
trade up/down. This means that less property is
becoming available on the market as the traditional
cycle is distorted.
Some chartered surveyors feel that higher prices are
needed to encourage people who are in negative equity
to move e.g. trade up or down, so that properties can be
released onto the market.
“One of the barriers to greater supply is price, higher
values are needed as people are in negative equity
and are basically ‘hungover’. This is preventing them
from moving as prices are still low relative to 5 years
ago. Prices need to rise another 15% to 20% before
people start selling” Simon Stokes, SCSI Residential
Professional Group Chair, Dublin
“Scarcity of stock in certain areas because some
would be sellers are in negative equity trap”
Chartered Surveyor, Munster
However the release of properties onto the market
is expected to increase as the banks start to address
negative equity.
“A significant cohort of consumers now want to buy
housing, from first time buyers to people trading
up as they now have kids/larger families. Negative
equity is an issue here. The banks are beginning to
address negative equity” Kieran McQuinn10
The role that NAMA and the banks play in releasing
properties on the market is also considered a factor in the
supply and demand for property. There are fears that this
could lead to an oversupply of properties and
lower prices.
“The role that NAMA plays in the market remains to
be seen. They are a substantial player with a huge
weight of properties and they will play a significant
role. However they are under-resourced and they
could possibly hinder recovery if they aggressively
sell properties as this would add to stock and have
an impact on value” Gerard O’ Toole, SCSI Western
Regional Branch Chair
However, other experts believe that an increase in
repossessed properties being released on the market will
have little impact on the supply side.
“To date progress has been slow but the rate of
progress should improve as the banks now have
people to deal with resolution strategies. The rate of
progress should increase and this will result in some
properties being released on the market. But the
expectation is that this will not have a huge impact
on the supply side” Kieran McQuinn
10 Any comments from Kieran McQuinn are made on a personal basis rather than as a representative of the Central Bank.

Dublin Rest of
Leinster
Munster Connaught/
5.3: Availability of Finance
The availability of finance is a key issue in terms of
prospective purchasers being able to purchase a home. In
recent years, due to difficulties in obtaining finance, cash
transactions have begun to play a more prominent role in
property market transactions.
» Type of Investor Buying Residential
Letting Properties
23% 12% 9% 9%
The SCSI survey of members indicates that around half of
all property transactions were bought in cash. This varies
by region with cash buyers more dominant in Leinster
(54%) than in Dublin (47%) or Connaught/Ulster (42%).
The market is equally split between cash and mortgage
transactions in Munster. Over 50% of transactions are
bought via a mortgage in Dublin and Connaught/Ulster.
This is supported by experts. However, according to some
the cash buyer market is beginning to recede.
“Half of residential purchases are cash buyers but
Dublin Rest of
this is now receding” Leinster
John McCartney, Director of
Research, Savills
Differences exist by region when it comes to the
availability of mortgage finance, with seven in ten
chartered surveyors in Dublin seeing an increase in the
availability of mortgage finance, which may reflect why
there is a slightly higher proportion of mortgage buyers
versus cash buyers in the Capital.
Dublin Rest of
Leinster
Large Multi-Unit
Investors
18%
Munster Connaught/
Some of this optimism in Dublin is based on more banks
competing for business.
“More lenders are more active in competing for
business” Chartered Surveyor, Dublin
Increased banking activity is also evident in Munster.
» Breakdown between Mortgage
and Cash Buyers
47% 54% 50% 42%
“Some cases where purchasers were granted
finance this year were not in 2012. We feel this is
due to EBS and PTSB re-entering the mortgage
market and creating more competition again”
According to one chartered surveyor, banks are even
promoting their increased lending activity amongst
chartered surveyors themselves.
“Banks have started to lend and they have physically
sent their representatives in to our office to inform
us of this” Chartered Surveyor, Leinster
This is supported by the latest update from the Irish
Banking Federation11 which indicates that credit
conditions could be improving as over 4,000 mortgages
were drawn down in the third quarter of 2013,
significantly up from Q1 2013.
» Breakdown between Mortgage
and Cash Buyers
47% 54% 50% 42%
51%
41% 50%
2%
Dublin Rest of
Leinster
Munster
» Availability of Mortgage Finance
55%
5% 3%
Cash Mortgage Don’t know
Ulster
7% 13% 9%
2%
Large Multi-Unit
Investors
Munster Connaught/
Ulster
72%
78%
50% 73%
41%
18%
5% 9%
Buy to let
Investors
Other
Dont know
Connaught/
Ulster
2%
Dublin Rest of
Leinster
Munster
» Availability of Mortgage Finance
70% 46% 57% 48%
Dublin Rest of
Leinster
Munster Connaught/
Ulster
24%
30% 40%
52%
17%
3% 4%
51%
41% 50%
55%
5% 3%
Cash Mortgage Don’t know
Ulster
5% 9%
Buy to let
Investors
Other
Dont know
Connaught/
Ulster
Source: SCSI Survey of Members, Dec 2013. Source: SCSI Survey of Members, Dec 2013.

7,000
5,000
3,000
However, difficulties accessing mortgage finance still exist
and according to some chartered surveyors only those
with the lowest risk e.g. a secure job can get a mortgage.
“Applicants would need to be in very secure
employment have a substantial deposit”
Furthermore, experts predict that difficulty accessing
credit will continue due to a tightening of credit standards
and bankers are changing their tone to borrowers.
There are also concerns that existing bad debt, mortgage
arrears or negative equity will have an adverse impact on
the availability of mortgage finance.
“Despite the banks PR spiel about offering and
selling mortgages, there are very few people that
meet the stringent criteria or who don’t have some
form of debt considered a bad debt” Chartered
Surveyor, Leinster
Expert Views on Finance Solutions
Experts believe that the banking sector needs to address
the availability of mortgage finance by providing products
which address negative equity and those with tracker
mortgages to help increase mobility.
“The banks need to provide products to address
negative equity. Some banks are being innovative
and are introducing these products already”
Kieran McQuinn
11 IBF Housing Market Monitor Q3 2013
“There is a requirement for the banking sector to
underpin the recovery of the residential market
by developing, marketing and approving products
which can address some of the structural issues.
New products which can facilitate trading up and
trading down with negative equity for example
would be beneficial. Real and attractive options for
customers with tracker mortgages would increase
mobility and availability of properties for sale”
John Hogan, Department of Finance
There are also calls to improve the mortgage lending
process from staff training to greater clarity around
the application and qualification process, and quicker
decision making.
“Front line staff need to be trained in prudent
lending but the type of prudent lending which
looks not just at the present income and position
of the prospective homeowner but their future
prospects. Greater transparency and clarity around
the application and qualification process would be
beneficial for consumers and the market”
John Hogan, Department of Finance
“In order to get the residential property market
moving, quicker decisions need to be made by
receivers and bankers, for example, by getting their
homework done such as getting title deeds sorted
before properties are brought to market”
Peter Murtagh, SCSI North East Leinster
Region Chair
» Mortgage Drawdowns
Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013
6,000
4,000
2,000
1,000
0
Source: IBF

Building Constraints
– Construction/Development Finance
The availability of construction finance is felt to be critical
to improving supply. It is also felt that the level of finance
available needs to be increased from the current level of
50-60% of construction costs.
“The availability of finance is key, if there is no
bank there is no housing supply. There is a chronic
shortage of housing in the region”
Michael Boyd, SCSI South East Leinster Region Chair
“Another barrier to supply is construction finance
and the lack of finance to build. Banks need to lend
to developers. The government tried to encourage
this but it did not work” Simon Stokes, SCSI
Residential Professional Group Chair
“We cannot force developers to build houses we
need to encourage them by reducing construction
costs and by providing development finance and
enabling the developer make a margin. Development
finance is only available up to 50%-60% of
construction costs. There is a requirement for a
greater and higher level of development finance to
be available in the marketplace” Hubert Fitzpatrick,
Director of Housing Planning Policy, CIF
“The finance issue is two fold, both consumers
and developers are unable to get finance. But
this financial issue is beginning to ease and this is
indicated in the Central Bank /SCSI surveys and it
should pick up in both sectors” Kieran Mc Quinn
However, development finance needs to be provided
in a way that avoids repeating past mistakes such as
speculative development.
“Development finance to support new building will
also be necessary without repeating the mistakes of
the past” John Hogan, Department of Finance
Building Constraints
– Construction Costs
In tandem with concerns about the lack of development
finance, high construction costs are also an issue and
there are calls for these to reduce in order to increase
housing supply. Examples given were changes to
planning fees and reduced building costs.
“The market has to rise and builders have to find
ways of reducing cost. The value of land has to be
reduced and planning fees and construction costs
have to come down for example block costs have to
be reduced. The cost of producing houses has to be
reduced. Local Authorities should change their fee
models, for example, they should reduce planning
fees in towns where there is demand” Michael Boyd,
SCSI South East Leinster Region Chair
“There is also a concern about the lack of supply and
building/development costs. Building costs have
not come down and increased housing regulations
are also putting pressure on costs” Kieran McQuinn
The requirement for social and affordable housing is also
an issue and the costs associated with this requirement.
“Developers’ obligations under the social and
affordable housing requirements of Part V of
the Planning Act have to be addressed, they are
currently excessive and cannot be sustained in their
current format ” Hubert Fitzpatrick, Director of
Housing Planning Policy, CIF
Monitoring of Credit Provision
The prospect of increased credit provision leads to some
experts fearing strong price increases and overlending,
similar to the levels witnessed in the celtic tiger days.
“The rate of credit provision is likely to rise and this
could fuel price increases. We still have an impaired
banking system yet we have strong price growth.
This could feed into a mortgage spiral so we need to
monitor and keep an eye on this” Kieran McQuinn
So there is a call for a more sustainable mortgage market
and improved monitoring of banks on targets and LTV’s.
It is felt that there is an increased ability to monitor the
LTV’s of banks now.
“The actions of banks need to be regularly
monitored on targets and LTVs, to ensure they don’t
return to the levels witnessed in the celtic tiger days.
The situation now is very different. We now have
more information on commercial banks so we can
observe the LTVs of banks and monitor this”
Kieran McQuinn
“What we need to do here is build a sustainable,
affordable mortgage market which participates in
but does not drive economic recovery” John Hogan,
Department of Finance

6:
Residential Property
Market Activity
Values

6: Residential Property Market
Activity Values
The SCSI survey of members reveals that market activity
has picked up nationwide in a number of areas such
as the volume of sales agreed, sales instructions from
receivers/banks and sales instructions from vendors.
In Dublin and Connaught/Ulster, almost all chartered
surveyors (92%) said that the volume of sales agreed
had increased in 2013 and three quarters of chartered
surveyors said this in Leinster and Munster. This is a
strong indicator of increased activity in the residential
property market.
In Dublin, this is further supported by the high proportion
of chartered surveyors (75%) who say that that sales
instructions from vendors had increased.
On the other hand the greater majority of chartered
surveyors in all regions said that residential property
stock for sale and the volume of lettings had either
remained the same or decreased. The decrease in the
volume of lettings may reflect issues with the supply of
properties to rent.
» Residential Market Activity 2013
Sales Instructions
(fromVendor)
Sales Enquiries
(from Receivers / Banks)
Volume of
Sales Agreed
Residential Property
Stock for sale
Volume of
Lettings
2%
8%
4%
8%
26%
30%
20%
44%
16%
25%
75% 22%
50% 39% 6%
64% 28%
56% 36% 4%
74% 20% 3%
61% 23% 4%
66% 28%
72% 24%
92% 8%
74% 15% 7%
77% 15%
92% 8%
44% 30%
30% 29% 34%
38% 32%
36% 44%
22% 44% 23%
23% 33%
42% 42%
40% 35%
Dublin Increase Remain Same Decrease
Rest of Leinster
Munster
Connaught / Ulster

» CSO Residential Property Price Index
2005 2006 2007 2008 2009 2010 2011 2012 2013
150
140
130
120
110
100
90
80
70
60
50
All Residential Properties All Residential – Excluding Dublin All Residential – Dublin
Source: CSO Residential Property Price Index
12 November 2013
13 The CSO Residential Property Index does not include cash sales
The latest12 CSO Residential Property Index13 also shows
rising property prices with residential property prices at a
national level, increasing by 5.6% at the end of November
2013. In Dublin residential property prices grew by 1.3% in
November and were 13.8% higher than a year ago.

6.1: Estimated Average
Sales Prices for
Residential Properties
In the SCSI survey of members, chartered surveyors were
asked to estimate the average sales price of residential
properties in 2012 and 2013 based on transactions. It
should be noted that the changes in values were coming
from a very low base over a broad geographical base and
that there were lower levels of transactions in 2013.
At an overall level, residential property prices increased
by 15.7% in Dublin and by 5.7% outside Dublin. This is
similar to the percentage changes indicated in the CSO
Residential Property Price Index and would support the
view that the stability in property prices is in urban areas
and largely driven by a lack of supply in 2013.
In Dublin the price of 3 bed semi-detached homes
increased by 15% between 2012 and 2013. Similarly the
average price of a 4 bed semi-detached home in Dublin
increased by 14.64%. The average price of a 4/5 bed
detached home increased by 17% in Dublin.
» Estimated Average Sales Price 2013 by Property Type
% Change 2012–2013
» Dublin: +15.7%
» Outside Dublin: +5.7%
Connaught/Ulster
Average Sales Price 2013
2 Bed Town House €82,684
1 Bed Apartment €53,144
3 Bed Home €115,252
4 Bed Home €126,137
4/5 Bed Home €169,502
Munster
3 Bed Home €140,603
4 Bed Home €176,656
4/5 Bed Home €247,755
Dublin
3 Bed Home €279,003
4 Bed Home €329,583
4/5 Bed Home €452,080
Leinster
SCSI Survey of Members, Dec 2013. 14
SCSI Survey of Members, Dec 2013.
3 Bed Home €132,828
4 Bed Home €163,098
4/5 Bed Home €200,702
Source: 14 The figures contained in this map are based on a sample of average property value transactions from respondents and it is intended to be a guide to
average sales prices over 2013 rather than a comprehensive listing of transactions. Variations occur throughout the regions depending on responses
and transaction levels by member.

“Lack of supply of 3/4 bed properties has caused
the market in south Dublin to increase by 20-25%”
Chartered Surveyor, Dublin
Outside Dublin, residential property prices increased by
an average of 8.1% in Munster, 4.6% in Leinster and 3.9%
in Connaught/Ulster, according to SCSI members.
There are expectations of even more price increases in
Dublin over the next 12 months. The greater majority of
chartered surveyors expect the price of second hand rural
homes in Dublin to increase over the next 12 months.
Three quarters of chartered surveyors expect the price
of 4 bed detached bungalows to increase and six in ten
expect the prices of 3 bed detached bungalows, 3 bed
detached houses and 4 bed detached houses to increase.
A separate SCSI/Central Bank survey indicates that
residential property prices are expected to increase in
Dublin as well as outside Dublin.
» Expectations of Price Changes —
2nd Hand Rural Homes in Dublin
65% 75% 60% 62%
3 Bed
Detached
Bungalow
4 Bed
Detached
Bungalow
3 Bed
Detached
House
4 Bed
Detached
House
35%
25%
40% 38%
» Expectations of Y-on-Y change in residential property prices 2013 Q3 - 2014 Q3 (regional): 2013 Q3
Border
Dublin
National
West
Midlands
MidEast
South-East
South-West
MidWest
0% 20% 40% 60% 80% 100%
Source: Central Bank SCSI Survey of Chartered Surveyors

6.2: Residential
Rental Market
Rental Market
The PRTB / ESRI Rent Index shows rents for private
accommodation in the Dublin region continued to
increase strongly in the third quarter (July-September) of
this year, but outside the capital there was more modest
growth. Looking at rents on an annual basis, Dublin
rents grew by 6.4%, year on year (Q3 this year versus Q3
last year), but elsewhere rents actually showed a slight
decline (0.2%) over the same period.
Experts and chartered surveyors also concur that rental
prices are on the increase.
“Residential rentals have also picked up in city
and suburban areas in Munster. The ‘right stock’
is moving and there is demand for good quality
family homes and even a shortage of detached and
semi-detached houses” Trevor McCarthy, SCSI Rural
Professional Group Chair – Munster Region
According to SCSI members, residential rents in Dublin
vary from €878 per month for a 1 bed apartment to over
€1,700 per month for a 4 bed semi-detached house.
Average rental prices are much lower outside Dublin
and vary from €450 per month for a 1 bed apartment to
around €800 per month for a 4 bed semi-detached house,
approximately half the rental prices charged in Dublin.
» The PRTB Rent Index — Dublin
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2007 2008 2009 2010 2011 2012 2013
110
100
90
80
70
60
Outside Dublin Outside Dublin Houses Outside Dublin Apartments
Source: PRTB/ESRI
» Residential Rentals 2013
Dublin Rest of Leinster Munster Connaught/Ulster
Average Rental Price 2013 2013 2013 2013
1 Bed Apartment €878 €472 €450 €460
2 Bed Apartment €1,151 €587 €563 €571
3 Bed Semi-Detached €1,424 €711 €659 €628
4 Bed Semi Detached €1,707 €807 €747 €706

» Expectations of Supply of Properites
for Rent — Dublin
20% 29% 10% 8%
1 Bed
Apartment
2 Bed
Apartment
3 Bed
Semi
4 Bed
Semi
51%
44%
46% 48%
28% 27%
42% 42%
» Expectations of Rental Prices of
Property to Rent — Dublin
82% 91% 89% 86%
1 Bed
Apartment
2 Bed
Apartment
3 Bed
Semi
4 Bed
Semi
15%
6% 9% 9%
2% 2% 2% 5%
» Investment in Residential Market
91% 65% 45% 36%
1 Bed
Apartment
2 Bed
Apartment
3 Bed
Semi
4 Bed
Semi
» Expectations of Rental Prices of
Property to Rent — Dublin
82% 91% 89% 86%
1 Bed
Apartment
2 Bed
Apartment
3 Bed
Semi
4 Bed
Semi
15%
6% 9% 9%
2% 2% 2% 5%
91% 65% 45% 36%
35%
7% 13% 9%
2%
Dublin Rest of
Leinster
42%
55%
Munster Connaught/
Ulster
Letting Properties
23% 12% 9% 9%
72%
78%
50% 73%
Nine in ten chartered surveyors expect the supply of 3
and 4 bed semi-detached houses for rental in Dublin to
either remain the same or decrease. The majority also
expect this to be the case with 1 and 2 bed apartments.
“The rental shortage in Dublin is interlinked with the
supply and demand for residential property. People
who would buy are now renting. Multi-nationals
are buying big blocks already on the market so it’s
just a change of landowner rather than adding new
supply” Simon Stokes, SCSI Residential Professional
Group Chair, Dublin
The phasing-in period of the Housing (Standards for
Rented Houses) Regulations 2008 and a further set of
amended regulations in 2009 ended on 31 January 2013
so rental properties must now meet all the standards.
Chartered surveyors are saying that this is taking pre
1963 stock out of the rental market putting further
pressure on supply.
“The increased housing standards means that pre
-1963 stock has generally been taken out of the
system. Additionally no new apartments have been
built.” Ray Hanley, SCSI Valuations Professional
Group Chair
Given the expected lack of supply of rental properties
in Dublin it is not surprising that the vast majority of
chartered surveyors expect rental prices to increase
further over the next 12 months.
Almost all chartered surveyors expect the rental price of
2 bed apartments, 3 bed semi-detached houses and
4 bed semi-detached houses will increase over the
next 12 months.
“The residential rental market is a bigger factor
now. The population base is changing and some
people have no desire to purchase. The major rental
websites of Daft.ie and Myhome.ie are showing
that the number of properties available for rent has
reduced over the year and rents have increased.”
Ray Hanley, SCSI Valuations Professional Group
Chair

42% 42%
28% 1 Bed
Apartment
27%
2 Bed
Apartment
3 Bed
Semi
4 Bed
Semi
6.3: Residential
Investment Market
The vast majority of SCSI members agree that investment
in » the Expectations residential market of Rental in Dublin Prices has increased, of
while
the Property greater majority to Rent say the — Dublin
market remains the same in
Connaught/Ulster.
82% 91% 89% 86%
Type of Investor
There has been an increase in demand for residential
investment properties, particularly in Dublin from
investors seeking to take advantage of lower apartment
prices and rising rents.
Most of demand for residential investment is coming from
buy to let investors and some of the financial institutions
have 15%
re-entered the residential investment market
providing finance for investors.
6% 9% 9%
2% 2% 2% 5%
An increasing 1 Bed
trend 2 in Bed
2013 was the 3 Bed
number of
4 Bed
Apartment
Apartment
Semi
Semi
international investors purchasing multi-unit or multi-family
investments with almost a quarter of chartered
surveyors reporting that large multi-unit investors are
active in Dublin.
1 Bed
Apartment
2 Bed
Apartment
3 Bed
Semi
4 Bed
Semi
A recent Sherry Fitzgerald report15 indicates that there has
been a notable increase in professional investor activity in
the residential market with €232m invested in the multi-family
sector of the property market during 2013.
91% 65% 45% 36%
The extension of the Capital Gains Tax relief in Budget
2014 was a key driver of further investment in this sector,
Recent SCSI /RED C research on the letting market
suggests that tenure is changing and according to the
results, just over 1 in 3 Private Renters (36%) strongly agree
that they are happy renting and could see themselves
renting long-term rather than purchasing a home.
42%
55%
There are, however, fears that the high costs and taxes
including management 35%
charges, income and property
taxes, reductions in mortgage interest relief and the costs
associated with buy to let may threaten the provision of
private rented accommodation in the longer term if it
becomes 7% more unattractive for private 13% investors 9%
to enter
the market.
2%
Dublin Rest of
Leinster
Munster Connaught/
Ulster
“In relation to rents, there is restoration of the
natural order in relation to yields” John McCartney,
Director of Research, Savills
91% 65% 45% 36%
35%
7% 13% 9%
2%
Dublin Rest of
Leinster
42%
55%
Munster Connaught/
Ulster
Letting Properties
23% 12% 9% 9%
Dublin Rest of
15 Sherry Fitzgerald ‘House Prices increase for the first time in 7 years’ 2nd January 2014
Letting Properties
15%
6% 9% 9%
2% 2% 2% 5%
Leinster
Large Multi-Unit
Investors
Munster Connaught/
Ulster
72%
78%
50% 73%
41%
18%
5% 9%
Buy to let
Investors
Other
Dont know

7:
Interviews with
Regional SCSI Chairs

7.1: Dublin
Simon Stokes
SCSI Residential
In South Dublin there is a property supply shortage and
prices are rising, 15% year on year. Prices fell around
60% from their peak value, however, so recent increases
are from a very low base. There is also a shortage of
rental property in Dublin because there has been little
or no construction in the last 5 years. Also, tax and PRSI
changes have discouraged investors.
The main barrier to greater supply is price; higher values
are needed as many potential sellers are in negative
equity and are basically ‘hungover’. This is preventing
them from moving as prices are still too low relative to 5
years ago. Prices need to rise another 15% to 20% before
many people can consider selling.
Another barrier to supply is the lack of construction
finance. While the government promised to encourage
banks to lend to developers, this has largely been
unsuccessful.
Demand is strong in Dublin 2, 4, 6 and 8 and some parts
of Northside Dublin. There are very few new builds
and prices need to rise further to make development
attractive. Time will take care of this and in the end, the
market will self-correct.
The rental shortage is interlinked with the supply and
demand for residential property. People who would
normally buy are now renting. Additionally there is a
shortage of residential investors. Multi-nationals are
buying big blocks already on the market so it’s just a
change of landlord rather than adding new supply.
We expect further increases in 2014 and look forward
to more normal market conditions.
In the Residential market many of the sites which have
the benefit of planning permission are for high density
schemes, while the demand is for lower density housing.
Having sufficient zoned land with appropriate planning
for houses in Dublin is an issue as the lack of supply of
traditional houses has resulted in significant increases in
prices in Dublin.
The residential rental market is a bigger factor now.
The population base is changing and some people
have no desire to purchase. The major rental websites
of Daft.ie and Myhome.ie are showing that the number
of properties available for rent has reduced over the
year and rents have increased. The increased housing
standards means that pre -1963 stock has generally
been taken out of the system and not been replaced.
Additionally no new apartments have been built.
The overall picture is a gradual recovery with increasing
employment and low interest rates. However the growth
in house prices in certain parts of Dublin is a cause of
concern - there needs to be a reasonable supply of family
homes in the right locations in order to maintain an
appropriate balance in the market place.
Ray Hanley
SCSI Valuations

We are seeing a turn in the market and the Personal
Insolvency legislation will free up the market further. In
terms of economic growth, people are shrugging off the
recession and spending growth is greater.
The availability of finance is key, if there is no bank,
there is no housing supply. There is a chronic shortage
of housing in the South Eastern region.
The market has to rise and builders have to find ways of
reducing cost. The value of land has to be reduced and
planning fees and construction costs need to come down,
for example, block costs have to be reduced. The cost of
producing houses has to be reduced. Local Authorities
should change their fee models; they should reduce
planning fees in towns where there is demand.
7.2: Leinster
Michael Boyd
SCSI South East Leinster
Region Chair
The market is ‘hard work’ and there is no great recovery
in the residential and commercial market in the North
East region.
In order to get the residential property market moving,
quicker decisions need to be made by receivers and
bankers, for example, by getting their homework done
such as getting title deeds sorted before properties are
brought to market.
There needs to be a clear out of the glut of property and
take a weight off people’s shoulders.
There is an adequate supply of residential property in the
North East. The properties with banks and receivers has
not been released yet but this will happen in the 2014.
Demand will increase but there needs to be some
incentive for sales to be completed before year end such
as property tax exemptions.
There will be increased activity in 2014, primarily in the
residential market. However money needs to flow, there
needs to be faster lending and quicker decisions and the
torture needs to be taken out of the process of lending.
Peter Murtagh
SCSI North East Leinster
Region Chair

7.3: Munster
Activity is up in Munster in the last 12 months, but a lot of
this is focused in the urban areas of Cork and Limerick.
In residential property there is the same issue across the
province, a shortage of proper stock e.g. 3 bed
semi-detached, 4 bed semi-detached and 4/5 bed
detached houses.
Demand is strong in the suburban areas of Cork and
Limerick and it is starting to improve in the satellite
towns but not to the extent of the urban areas.
Residential rentals have also picked up in city and
suburban areas. The ‘right stock’ is moving and there
is demand for good quality family homes and even a
shortage of detached and semi-detached houses.
Trevor McCarthy
SCSI Rural Professional Group
Chair Munster Region
7.4: Connaught/Ulster
€
At an overall level there is a greater activity within the
market with growing levels of confidence that the bottom
of the market may have been reached in some localised
markets. In the stronger locations there is certainly
evidence that buyers are more active with increased
competition for the better properties. Demand has
remained strongest in larger population centres that
have good infrastructure, amenities and employment
opportunities. Conversely there are large parts of the
region particularly in rural locations that has very limited
property demand in the last 12 months.
A sizeable proportion of the residential stock is of a poor
quality and much of it over priced. Accordingly, there is
a lot of stock that is not actively on the market and is
simply not attracting interest. There is also an increasing
volume of distressed properties being brought to the
market in the region and we anticipate that this process
is likely to continue in the short to medium term. These
properties are attracting price sensitive cash buyers for
both owner occupation and increasingly investment.
There is an imbalance in the region between supply and
demand and a further softening of prices is needed in
some locations. While CSO data shows that prices have
stabilised throughout the country, they may not have
bottomed out in parts of Connaught/Ulster and are
unlikely to possibly until next year. In the interim, buyers
will continue to seek out the better quality more central
located properties, most of whom are buying with cash.
I feel a modest recovery is imminent in many locations
but this recovery needs to be underpinned by bank
lending in the form of home and business loans.
Gerard O’Toole
SCSI Western Regional
Branch Chair

Regional Structure
Members of the Society of Chartered Surveyors Ireland operate
throughout Ireland. The Society has headquarters in Dublin and
has four regional branches which are as follows:
Southern Region:
Cork, Kerry, Tipperary, Limerick, Clare
South Eastern Region:
Wicklow, Wexford, Waterford, Carlow, Kildare, Kilkenny,
Laois, Offaly
North Eastern Region:
Meath, Westmeath, Louth, Monaghan, Cavan
Western Region:
Galway, Mayo, Roscommon, Longford, Sligo, Leitrim, Donegal

About the Research
This report is based on the views, perceptions and
opinions of chartered surveyors and a range of leading
experts in the property industry.
» The SCSI organised an online survey amongst 400
members (chartered surveyors) to determine average
sales prices, expectations of price changes and
supply issues
» Amárach Research conducted in-depth interviews
with SCSI Chairs to capture their views on the
opportunities and challenges in the property market
» Amárach Research conducted in-depth interviews
with leading industry experts to capture their views
on the opportunities and challenges in the
property market
This report includes quantitative results from the SCSI
online survey of members. Members were asked to
estimate the average sales prices of residential properties
in their region based on transactions rather than asking
prices. These average sales prices are based on estimates.
In some cases the averages are based on very small base
sizes e.g. due to the low level of transactions of new build
homes, so some averages are indicative rather
than definitive. Some percentages may not add up to
100%, this may be due to rounding or the exclusion of
don’t know responses.
For more information contact:
Conor O’Donovan
Director of Policy Communications
T: +353 (0)1 644 5500
E: codonovan@scsi.ie

Dating back to 1895, the Society of Chartered Surveyors Ireland is the
independent professional body for Chartered Surveyors working and
practicing in Ireland.
Working in partnership with RICS, the pre-eminent Chartered
professional body for the construction, land and property sectors
around the world, the Society and RICS act in the public interest: setting
and maintaining the highest standards of competence and integrity
among the profession; and providing impartial, authoritative advice
on key issues for business, society and governments worldwide.
Advancing standards in construction, land and property, the Chartered
Surveyor professional qualification is the world’s leading qualification
when it comes to professional standards. In a world where more and
more people, governments, banks and commercial organisations
demand greater certainty of professional standards and ethics,
attaining the Chartered Surveyor qualification is the recognised
mark of property professionalism.
Members of the profession are typically employed in the construction,
land and property markets through private practice, in central and local
government, in state agencies, in academic institutions, in business
organisations and in non-governmental organisations.
Members’ services are diverse and can include offering strategic advice
on the economics, valuation, law, technology, finance and management
in all aspects of the construction, land and property industry.
All aspects of the profession, from education through to qualification
and the continuing maintenance of the highest professional standards
are regulated and overseen through the partnership of the Society of
Chartered Surveyors Ireland and RICS, in the public interest.
This valuable partnership with RICS enables access to a worldwide
network of research, experience and advice.

Society of Chartered
Surveyors Ireland
38 Merrion Square
Dublin 2, Ireland
T: +353 (0)1 644 5500
E: info@scsi.ie
www.scsi.ie

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