IDA Ire land AN GHNIOMHAIREACHT INVESTMENT AND INFHEISTIOCHTA AGUS FORBARTHA DEVELOPMENT AGENCY Teach Pairc Wilton Park House Plas Vl?lton Wilton Place Baile Atha Cliath 2 Eire Dublin 2 Ireland Fan (01) 603 4000 Tel: (01) 603 4000 Fae: (01) 603 4040 Fax: (01) 603 4040 Sulomh Greasaln Website 14th November 2018 Re: FOI request Dear Mr Foxe I refer to your request to IDA Ireland dated 30th September 2018 which was received on 1St October 2018. Your request sought: - copies of any reports, brie?ngs, memoranda, submissions, or other such review/explanatory documents prepared for IDA senior management or any government minister regarding the issue of housing shortages in Ireland. This request to cover period 1 Jan 2018 to date of receipt of this request. I, Catherine Slowey, have today made a final decision to grant your request. Rights of appeal If you are unhappy with this decision you may appeal it. In the event that you need to make such an appeal, you can do so by writing to the Freedom of Information Unit or by e-mail to foiunit@ida.ie. Your correspondence should include a fee of ?30 for processing the appeal. Payment should be made by way of bank draft, money order, postal order or personal cheque made payable to IDA Ireland. If you wish to make payment by electronic means please contact Shirley Carter at You should make your appeal within 4 weeks from the date of this notification, where a day is de?ned as a working day excluding, the weekend and public holidays. However, the making of a late appeal may be permitted in appropriate circumstances. The appeal will involve a complete reconsideration of the matter by a more senior member of the staff of this body. In the event that you need to make such an ?application for review? you can do so by writing to: The Of?ce of the Information Commissioner, 18 Lower Leeson Street, Dublin, 2. D02 HE97 Should you write to the Information Commissioner making an appeal, please either refer to this letter or enclose a copy. Alternatively you may appeal using the Of?ce of the Information Commissioner on-line application form which can be located at: If an appeal is made by you and accepted, the Information Commissioner will fully investigate and consider the matter and issue a fresh decision. Publication All non-personal FOI requests will be recorded on an FOI disclosure log which will be published on the IDA Ireland website in due course. Should you wish to discuss the above, please contact me at 01 6034000 or Yours sincerely, Catherine Slowey Decision Maker Residential Property Irish City Regions Prepared for: IDA February 2018 De?nitions Median Price Median price is the midpoint price of all dwellings transacted over the period in question. This is used as opposed to average prices as it provides a better measure in the Irish market given the relatively small size of the market and the distortions that can occur due to very large or very small transactions. Eircode An Eircode is a smart location postcode for all Irish addresses. which identi?es an individual address (rural or urban). and shows where it is located. Each location has a general Eircode and each individual address contains its own property unique Eircode. Please note that ?Eircodes? are distinct from ?Postcodes'. which are mentioned in the report in relation to Dublin. Traditionally in Dublin. the county was split into postcodes from Dublin 1 to Dublin 24. plus County Dublin for the remainder. When Eircodes were introduced in 2015. the traditional postcode remained in use but in conjunction with an Eircode. Vacancy Rate The vacancy rate is the number of unoccupied habitable homes as a proportion of the total housing stock. Lisney Residential Property - Irish City Regions Contents 01 02 O3 O4 05 06 Overall Irish Market 1.1 Introduction 1.2 Sales Market 1.3 Rental Market 1.4 Residential Construction Pipeline 1.5 Housing Policy 1.6 International Comparisons 1.7 Summary Dubun 2.1 Sales Market 2.2 Rental Market 2.3 Residential Construction Pipeline 2.4 Summary Cork 3.1 Sales Market 3.2 Rental Market 3.3 Residential Construction Pipeline 3.4 Summary Galway 4.1 Sales Market 4.2 Rental Market 4.3 Residential Construction Pipeline 4.4 Summary Limerick 5.1 Sales Market 5.2 Rental Market 53 Residential Construction Pipeline 5.4 Summary Waterford 6.1 Sales Market 6.2 Rental Market 63 Residential Construction Pipeline 6.4 Summary Lisney Residential Property - Irish City Regions mcoawm 36 (E: Eauo? Epgwc?mq >053 .mi! I?n bum ling: a, my 1 3., I?ll . 01 Overall irisii Market 1.1 Introduction The Irish residential market has seen a significant change in underlying fundamentals in the past ?ve years. Purchaser demand has increased considerably since 2012. and with a shortage of available properties. most notably in urban centres. this has led to price inflation. In spite of this. prices remain 24% below their previous cycle peak nationally. The lack of supply in the sales market has also had an impact on the rental market. Rents have increased considerably from the bottom of the market As a result. in December 2016. the government intervened and introduced rent predictability measures to limit increases. Residential construction indicators are more positive of late. suggesting a continued increase in activity will occur in the coming years. The m05t recent data from the Department of Housing. Planning and Local Government shows that to the end of August 2017. national residential completions have increased by 29% on an annual basis. Commencement notices have increased by 45% over the same period. In the year to the end of June 2017. 5.750 units were granted planning permission nationally. Comparing this to 2013. when 73% fewer units were granted permission. highlights the improvements that have been made in addressing the supply imbalance. albeit increases are from a low base. These indicators. combined with robust Irish economic current and forecast variables. suggest a better functioning residential market in Ireland over the coming years. 1.2 Sales Market 1.2.1 Overview Following the collapse of the Irish residential property market in 2007. a new cycle of growth emerged in the latter part of 2012 in urban areas and in 2013 2014 in other locations. Since then. purchaser demand has continued to strengthen. most notably in large urban areas. and strong price in?ation has occurred. While prices have risen by 70% nationally in the last ?ve years. much of this growth offset the over-correction that occurred between 2007 and 2012 and was from a very low base. Over that period of decline. residential prices fell well below their replacement cost. to levels that were unsustainable in the longer-term. Also over that period. new home construction depleted dramatically with completion levels falling from over 93.000 units per annum nationally. to just 8.300 units at the lowest point in 2013. a 91% reductionl. This resulted in a signi?cant fall off in supply levels. As the economy started to improve and purchaser demand began to return to the market. more limited options were open to potential purchasers. Hence. prices grew due to increased competition for limited available stock (combined with a growing population). While recent percentage price increases have been strong. the Irish government's think-tank. the Economic and Social Research Institute (ESRI). suggests in its most recent report that Irish houses are not overvalued and the housing market is not overheating. 1 This is based on E58 connections. Lisney Residential Property - Irish City Regions Residential Property Price Index (January 2005 September 20173455?)? 0? 0" 36599? 5?55 v5 0? 0" ta" 94? Source: 080. Lisney We expect prices to continue to grow in the medium-term. albeit at a slower pace to that witnessed in recent years. This is due to the fact that new home construction has begun to pick up pace and as more new home stock becomes available. the intense competition for available properties will lessen. Llsney Residential Property Irish City Regions 1.2.2 Demand In terms of future demand for accommodation in Ireland generally and in the various city regions. reviewing likely population trends is important. The CSO has produced population projections up to 2046. We have applied these projections (based on the best case scenario MlFl) to the various counties and then assumed 2.5 persons per household. thus showing an additional housing requirement over the years. This is set out in the table below annually. State Dublin Cork Galway Limerick Waterford Population Implied Population Implied Population Implied Population Implied Population Implied Population Implied Forecast Housing Forecast Housing Forecast Housing Forecast Housing Forecast Housing Forecast Housing Need Need Need Need Need Need 2018 4.874.000 22.400 1.379.000 6.400 556.000 2.800 264.000 1.200 199.000 800 119.000 400 2019 4.931.000 22.800 1.395.000 6.400 562.000 2.400 267.000 1.200 202.000 1.200 120.000 400 2020 4.989.000 23.200 1.412.000 6.800 569.000 2.800 270.000 1.200 204.000 800 122.000 800 202.1 5.047.000 23.200 1.428.000 6.400 575.000 2.400 274.000 1.600 207.000 1.200 123.000 400 2022 5.111.000 25.600 1.446 .000 7.200 583.000 3.200 277.000 1.200 209.000 800 125.000 800 2023 5.175.000 25.600 1.464.000 7.200 590.000 2.800 280.000 1.200 212.000 1.200 126.000 400 2024 5.240.000 26.000 1.483.000 7.600 597.000 2.800 284.000 1.600 214.000 800 128.000 800 2025 5.306.000 26.400 1.501.000 7.200 605.000 3.200 288.000 1.600 217.000 1.200 129.000 400 2026 5.373.000 26.800 1.520.000 7.600 613.000 3.200 291.000 1.200 220.000 1.200 131.000 800 2027 5.438.000 26.000 1.539.000 7.600 620.000 2.800 295.000 1.600 223.000 1.200 133.000 800 2028 5.503.000 26.000 1.557.000 7.200 627.000 2.800 298.000 1.200 225.000 800 134.000 400 2029 5.569.000 26.400 1.576.000 7.600 635.000 3.200 302.000 1.600 228.000 1.200 136.000 800 2030 5.636.000 26.800 1.595.000 7.600 642.000 2.800 305.000 1.200 231.000 1.200 137.000 400 2031 5.703.000 26.800 1.614.000 7.600 650.000 3.200 309.000 1.600 233.000 800 139.000 800 2032 5.772.000 27.600 1.633.000 7.600 658.000 3.200 313.000 1.600 236.000 1.200 141.000 800 2033 5.841.000 27.600 1.653.000 8.000 666.000 3.200 317.000 1.600 239.000 1.200 143.000 800 2034 5.911.000 28.000 1.673.000 8.000 674.000 3.200 320.000 1.200 242.000 1.200 144.000 400 2035 5.982.000 28.400 1.693.000 8.000 682.000 3.200 324.000 1.600 245.000 1.200 146.000 800 2036 6.054.000 28.800 1.713.000 8.000 690.000 3.200 328.000 1.600 248.000 1.200 148.000 800 2037 6.126.000 28.800 1.733.000 8.000 698.000 3.200 332.000 1.600 251.000 1.200 149.000 400 2038 6.200.000 . 29.600 1.754.000 8.400 707.000 3.600 336.000 1.600 . 254.000 1.200 151.000 800 2039 6.274.000 29.600 1.775.000 8.400 715.000 3.200 340.000 1 1.600 257.000 1.200 153.000 800 2040 6.350.000 I 30.400 1.797.000 8.800 724.000 . 3.600 344.000 1.600 - 260.000 1.200 155.000 800 2041 6.426.000 30.400 1.818.000 8.400 733.000 3.600 348.000 1.600 263.000 1.200 157.000 800 2042 6.503.000 30.800 1.840.000 8.800 741.000 3.200 352.000 1.600 266.000 1.200 159.000 800 2043 . 6.575.000 . 28.800 1.860.000 8.000 750.000 . 3.600 356.000 1.600 . 269.000 1.200 160.000 400 2044 . 6.647.000 28.800 1.881.000 8.400 758.000 3.200 360.000 1.600 272.000 1.200 162.000 800 2045 6.720.000 29.200 1.901.000 8.000 766.000 3.200 364.000 1.600 275.000 1.200 164.000 800 2046 6.794.000 29.600 1.922.000 8.400 775.000 3.600 368.000 1.600 278.00) 1.200 166.000 800 Source: 050. Lisney 7 Lisney Residential Property - Irish City Regions In summary. the following number of residential units is required. on average. each year based on the 0505 population forecasts and assuming 2.5 persons per household. Annual Average Housing Need National 27. 250 Dublin - i 7.710 A Cork 3.120 Galway 1,480 Limerick 1.120 Waterford 660 Source: 080. Lisney It should also be noted that the draft National Planning Framework Ireland 2040 Our Plan has also set out population targets for the various city regions. In summary. it seeks between 50% and 60% growth in the population of regional cities and population growth of between 20% and 25% in Dublin. We believe that the growth targets set out by the 080 are more realistic. We believe that across the entire of Dublin. the future housing need will be split 50/50 between houses and apartments. However. in Dublin city centre it will be almost exclusively apartments. In other city regions. the split is more likely to be 75/25 houses to apartments. 1.2.3 Availability While the number of previously occupied properties second-hand) for sale remains at relatively low levels. new homes schemes are now starting to produce additional supply. which is adding to availability. Focusing on the previously occupied section of the market second-hand homes). the number of properties available for sale in November 2017 in each of the key counties is set out below. While these supply figures are below optimum levels. they are higher than the lowest level reached in the latter part of 2016. which indicates that there is now more choice available for potential purchasers than there was at that time. Supply of Previously Occupied Residential Units (November 2017) Eon; ?Houses Total Dublin 2.673 921 3.777 Cork 2.844 144 2.988 Galway . 1.175 I 7 111 A i 1.286 Limerick 865 92 a 957 Waterford 544 31 575 Nationwide 18.727 1.981 20.708 Source: Lisney. Daftje. MyHome.ie Lisney Residential Property - Irish City Regions It is not possible to accurately track the number of new builds that are available as many are sold prior to completion or the sales process does not complete. However, there are about 500 individual schemes under construction at present across Ireland. Set out below are the most high profile schemes in each of the counties. DubUn Clay Farm, Phase 1: Leopardstown. '410 houses Dublin 18 Phase 2: 800 houses Marina Village, '158 houses Greystones. Co Wicklow '200 apartments (Greater Dublin Area) Fernbank, .262 apartments Churchtown, Dublin 14 Marianella. Rathgar. Dublin 6 Silverbanks, Phases 1 and 2 sold Baldoyle, '210 units Dublin 13 Phase 3 due 400 apartments Lisney Residential Property - Irish City Regions Lansdowne Place, Dublin 4 • 200 apartments (high end) Rathbourne Park, Ashtown, Dublin 15 Phase 2 due in 2018 St Marnocks Bay, Portmarnock, Co Dublin •300 houses over all phases Grace Park Wood, Drumcondra, Dublin 9 • 100+ houses Lisney Residential Property - Irish City Regions • 100+ houses 10 Rosefield. Model Farm - 20 houses Road. Model Farm Road. Co. Cork Kinsale Manor, Kinsale 136 houses Manor. Rathmore. Kinsale, Co. Cork Cluain Mara. Kinsale, Co. 27 houses Cork {Clonlara, Clonlara, Kerry 144 houses Pike. Co. Cork . Eden. Blackrock, Cork 16 units - PP sought for 147 units i Drakes Point. Drakes Point. . 45 houses Crosshaven, Co. Cork 11 Lisney Residential Property Irish City Regions Lisheen Woods , Ovens, Co. Cork • 150 houses Janeville, Cork Road, Carrigaline, Co. Cork • 6 house Woodview, Fionn Laoi, Ballincollig, Ballincollig, Co. Cork • 58 houses Dunkerrin, Dunkerrin, Mount Oval Village, Rochestown, Co. Cork • 14 houses Convent Garden, Winters Hill, Kinsale, Co. Cork • 8 houses Earls Well, Earls Well, Waterfall, Co. Cork • 42 houses Lisney Residential Property - Irish City Regions 12 13 Foxwarren, Moneygourney, Douglas, Co. Cork • 28 houses Glashaboy Woods, Upper Riverstown, Glanmire, Co. Cork • 6 houses Blackrock House, Blackrock, Co. Cork • 37 apartments Crawford Woods, Glanmire, Co. Cork • 40 houses Lisney Residential Property - Irish City Regions i Gort an Duin. Phase I Oranhill. EI it?: I .Oranmore- Oranmore, Co Galway Gleannt?n Na hAbhann. 22 houses Craughwell. I Co Galway Reilean. I Phase Roscam. Roscam. 62 houses 1 Co Galway Llsney Residential Property Irish City Regions 14 15 Bloomfield. 150 houses Annacotty, Co Limerick Caislean na hAbhainn, Phase Castletroy, Co Limerick 35 houses Ros Mor, Phase The Meadows, Ballyneety, 160 houses Co Limerick Evanwood. 36 houses Golf Links Road. Castletroy. Co Limerick f. Templevilte, Ballinacurra 42 houses K. 3 Road. Punches Cross, Co Limerick i i Llsney Residential Property - Irish City Regions Waterford Castlekeep. 18 houses Friars Walk, Abbeyside. Dungarvan. Co Waterford Cluain L?rach. Phase 4: . Knockenduff. Tramore. Co Waterford 23 houses Mountfield, 60 houses New Development Tramore. Tramore. Co Waterford Cluain na Si. 15 houses Ring, Co Waterford Llsney Residential Property Irish City Regions 1.2.4 Vacancy Rates Official data on current vacancy rates in Ireland is not available and plotting availability (set out below) against housing stock does not provide an accurate result as many vacant properties are not for sale. However, findings from Census 2016 provide some indications. 0n Census night in April 2016, the housing stock nationally stood at 2,003,645 dwellings. A total of 183,312 units were categorised as vacant. leaving the national vacancy rate at 9.2% (excluding holiday homes). There were significant variations in the vacancy rate between locations with Dublin having the lowest rate at Cork at Galway at 11.1%, Limerick at and Waterford at Vacancy Rate Excluding Holiday Homes (April 2016) Vaancy Rate 17.60!? 11.10% 100096 am 9'90? 9.10% 3.70% 5.90% 6111K 4.m% 211396 0.10% . Dublin (on: Gamay Jmemx wanerlm Naiuoml Average Source: 080, Lisney 1.2.5 Sales Prices Achieved sales prices across the country vary considerably with Dublin levels significantly ahead of the other city regions. Set out below are the median2 prices achieved for the year to the end of September 2017. This is split by buyer type (?rst-time-buyer. mover and investor) to show the variance between the different categories of purchaser, and also by the nature of the property (new or previously occupied). As can be seen, movers those trading up or down) have the capacity to spend the largest amount on homes. while investors and first-time-buyers generally compete with each other at the lower end of the market. Median Prices by Buyer Type (Year to September 2017) County All Buyer Types First?Time-Buyer Mover Investor Dublin ?325,000 ?312,500 ?368,875 ?262,500 Cork ?190,000 ?205,000 ?206,250 ?126,500 Galway ?170,250 ?197,500 ?184,000 ?127,500 Limerick ?145,000 ?172,000 ?145,000 ?98,250 Waterford ?128,750 ?172,500 ?150,000 ?77,500 Source: 080, Lisney 7 Given the relatively small nature of some parts of the Irish property market, the calculation of average prices can be distorted by very large or very small sales prices. As such, the median price is a more accurate measure. Lisney Residential Property - Irish City Regions Median Prices by Nature of Property (Year to September 2017) County All Property Types Previously Occupied Newly Built Dublin ?325,000 ?312,500 ?368,875 Cork ?190,000 ?205,000 ?206,250 Galway ?170,250 ?197,500 ?184,000 Limerick ?145,000 ?172,000 ?145,000 Waterford ?128,750 ?172,500 ?150,000 Source: 050, Lisney To provide some context to the current median pricing levels above, the chart below shows the trend in median prices since January 2010 for all property types. Median Prices All Property Types (2010 03 2017) Median Price ?000,000 ?350,000 . ?300,000 - ?250,000 ?200,000 ?150,000 ?100,000 ?50,000 e0 2010 2011 2012 2013 2014 2015 2016 I Dublin I Cork 1? Galway I Limerlck .. Waterford Source: 050 1.2.6 Affordability The most recent DKM Irish Housing Affordability Index for May 2017, showed that nationally, a working couple who are first-time-buyers use 21.2% of their net income to fund a mortgage. In Dublin the figure for a couple under the same scenario is 27.6%. To put this in context, during the boom years of the last property cycle, the national ?gure was 32%, while in Dublin the rate stood at 42.7% (December 2007). As such, properties are significantly more affordable now compared to that time. 1.2.7 Mortgage Lending The Irish mortgage market has witnessed a notable uplift in activity since early 2014 and again in the past 18 months. The total number of drawdowns in the 12 months to the end of 03 2017 was up by 31% in value terms and 20% in volume terms. The first-time-buyer cohort is driving market activity and currently accounts for half of all mortgage drawdowns. Mover purchasers make up around 30% of drawdowns, while investor mortgages account for approximately The remaining market activity relates to re-mortgages and top-ups. Lisney Residential Property Irish City Regions 18 19 When re-mortgages and top-ups are removed, the number of new mortgage activity increased by 29% in volume terms in the year to 03 2017. New mortgage lending has increased steadily in annual terms since its lowest level in 01 2012. *New Mortgage Lending 12-Month Rolling Total (01 2012 03 2017) No.? Mortgage: 550.0(1) I I 15.00:o,nm - ignul - - - - moon - '153'19 5,13 Source: Banking 8 Payments Federation of Ireland, Lisney 'Excludes remortgages and top-ups. 1.3 Rental Market 1.3.1 Context The Irish rental market remains exceptionally active. Supply is tight in many areas and rents have risen rapidly in recent years. This is due to a number of factors including changing demographics; an inability by many to obtain a mortgage as a result of the recession years limiting savings and hence remaining in the rental sector for longer; private landlords moving out of the market due to increased regulation and costs resulting in a declining level of supply; and a lack of construction again limiting supply. In a bid to address rising rents. the government introduced a number of rent predictability measures in the last two years. In a rent pressure zone, annual increases are limited to 4% while outside of these areas. rents can only be reviewed every two years (see section 1.5.4). These rent predictability measures have given certainty to both landlords and tenants in areas where rents have increased rapidly in recent years. Ultimately, they assist in delivering more affordable accommodation solutions by providing predicable price increases. The Government is also looking at improving the functioning of the rental sector more generally and in particular. expanding the build?to?rent sector. The aim is to improve the supply of homes at affordable rents. In terms of build-to-rent, this is a sector of the market that did not traditionally exist in Ireland. However, its benefits in terms of better on-site facilities for tenants and more professional estate management means it is potentially more suitable for longer-term tenant occupancy. Lisney Residential Property - Irish City Regions 1.3.2 Rental Prices The Residential Tenancies Board (RTB) registers and tracks details of all residential rentals in Ireland. Set out below are average achieved rents across all property types and sizes in each of the counties. Average Achieved Rents (02 2017) County All Property Types Dublin ?1,382 Cork ?911 Galway ?928 _Limer1'ck ?743 Waterford ?630 Source: RTB Further analysis based on the number of bedrooms and nature of the accommodations is set out below. One-Bed Average Achieved Rents (O2 2017) County Detached House I Semi-Detached House Terraced House Apartment Dublin I - ?769 ?1,019 ?1,169 Cork ?569 ?639 ?693 ?747 Galway ?583 - - ?679 Limerick - - - ?570 Waterford - - ?435 ?516 Source: RTB Two-Bed Average Achieved Rents (02 2017) County Detached House I Semi-Detached House I Terraced House I Apartment Dublin ?1,428 ?1,279 ?1,242 ?1,402 Cork ?702 . ?825 . ?860 . ?961 Galway ?629 I ?740 . ?835 . ?882 Limerick ?570 ?633 ?637 ?682 Waterford ?552 ?589 ?585 ?602 Source: RTB Three-Bed Average Achieved Rents (O2 2017) County Detached House Semi-Detached House i Terraced House Apartment Dublin ?1,571 ?1,362 ?1,398 ?1666 Cork ?808 ?903 ?917 Galway ?728 . ?848 ?932 ?1118 Limerick ?672 . ?756 ?735 ?779 Waterford ?667 . ?701 I ?641 ?545 Source: RTB Lisney Residential Property - Irish City Regions 20 21 1.4 Residential Construction Pipeline 1.4.1 Completions In the first ten months of 2017. 15.062 units were completed nationallya. For the full year. we forecast that this will be just over 18.000 units (approximately 85% houses 15% apartments). This compares to just 8.300 units at the lowest point in the cycle in 2013, a 117% uplift. Residential Construction Nationwide (2012 2017f) Constructed Unit: 20003 18 .000 16.000 14,000 12 .003 10,000 8,000 6,000 2,000 I National Source: Lisney The completions figures for the nine months to the end of September 2017 are shown at county level in the table below. Number of Units Constructed (Ql 03 2017) County Units Dublin 4.239 Cork 1.458 Galway 727 Limerick 419 Waterford 278 Nationwide 13,533 Source: CSO, CIS 3 Please note that this is based on the Department of Housing. Planning and Local Government's ?gures, which relate to electricity connections. In recent times there have been some discussions about the accuracy of this information. While there are some issues. it does however remain the best source of data on completions. Lisney Residential Property - Irish City Regions 1.4.2 Under Construction The total number of units under construction in new homes schemes (with greater than 10 units) varies across regions with Dublin having the greatest number of units under construction. The table below shows the number of units under construction at the end of 03 2017. In Dublin. the number under construction has increased by 34% in the past 12 months (houses apartments Number of Units under Construction County I Houses I Apartments I Units Dublin 3,763 3.630 7.393 Cork 398 Galway 157 Limerick 116 Waterford 160 Source: 080, CS 1.4.3 Planning Granted The total number of units across each location with planning permission granted but construction not yet commenced. For Dublin this comprises all units permitted but not yet commenced. while the other areas comprise those that have obtained planning permission since January 2016. The information is provided for houses and apartments in each location. as granted through the relevant local authority. Number of Units with Planning Permission County Houses 1 Apartments 1 Total Dublin 9.014 12.884 21.898 Cork 2.425 257 2.682 Galway 847 62 909 Limerick 464 151 615 Waterford 313 42 355 1.4.4 Planning Submitted The total number of units across each lOCation with planning permission submitted but as of yet neither granted nor refused is analysed from January 2017 to the end of 03 2017. The information is provided for houses and apartments in each location. as granted through the relevant local authority. Number of Units with Planning Applications Submitted County Houses I Apartments lTotal Dublin 957 3.211 4.168 Cork 1.099 . 690 . L789 Galway 228 . 79 . 307 Limerick 252 . 20 272 Waterford 385 0 385 Source: 080, CS Lisney Residential Property - Irish City Regions 22 23 1.5 Housing Policy The Irish Government and regulatory bodies have introduced a number of policies in recent times relating to the housing market. These primarily comprise rules to reduce the pace of growth and others to increase new home supply. Some of the notable introductions are detailed below. 1.5.1 Central Bank of Ireland Macro-Prudential Rules The Central Bank of Ireland introduced macro-prudential mortgage market regulations in February 2015. Prior to this there were no limits on how much banks could lend to home buyers. The aim of the rules was to enhance the resilience of both borrowers and the banking sector. and to reduce the risk of spiralling house price due to easy access to ?nance. The rules were amended in January and November 2017. with the main details of the framework as follows: Loan-To-lncome Loan-To-Value First-Time- 3.5 gross 20% of all mortgages 90% loan 5% of all FTB .mortgages . can exceed this limit per . . can exceed this limit per Buyer Income (Le. 10% depOSIt) year year Mover 3.5 gross 10% of all MPImortIgages 80% loan 20% of all FTB mortgages . can exceed this limit per . . can exceed this limit per Purchaser Income (Le. 20% depOSIt) year year I Investor No Income I 70% loan 10% of mortgages can limits (Le. 30% deposit) exceed this limit per year 1.5.2 Rent Predictability Measures In a bid to address rising rents. the government introduced a number of measures in the last two years. In 2015. temporary measures were introduced whereby a landlord could only review rent every two years (traditionally reviews occurred annually). There are exceptions to this. mainly where a property has been substantially upgraded or if it is in a rent pressure zone (RPZ). In relation to the latter. RPZs (which includes all of Dublin and the surrounding commuter towns. in addition to Cork and Galway cities and suburbs) came into effect at the end of 2016 for a three year period. The aim of this was to provide rent predictability. whereby rental increases in the designated areas were capped at 4% per annum for three years. This means that outside of the RPZs (such as Limerick and Waterford) rents can only be reviewed every two years to market rateS. Within rent pressure zones. rents can be reviewed annually but capped at These measures have had some impact on rents in recent months. For example. the pace of growth in rents in Dublin has fallen from about 9% per annum last year to a current annual rate of Outside of Dublin. the rate has fallen from 9% to 1.5.3 Help-To-Buy Budget 2017 (in October 2016) introduced the 'Help-to-Buy Incentive'. This scheme allows ?rst- time-buyers to obtain an income tax rebate of 5% of the purchase price of a newly built house or apartment. The maximum relief that can be claimed is ?20,000 and no relief can be claimed on previously occupied properties. The aim of this scheme is to increase demand for newly built homes and hence encourage developers to increase construction levels. The government envisage that this scheme will cost about ?50m per annum. The scheme has been successful in bringing forward purchases due to lower deposit requirements. which in turn has encouraged some developers in certain parts of the market to commence construction. A number of months ago. there was concern that this was causing price increases. However. in the year to the end of September. only 4.9% of all sales nationally were to ?rst-time-buyers purchasing a new home. As such. this is not having as signi?cant effect on the market any some thought. Lisney Residential Property - Irish City Regions 1.5.4 Ireland Strategic Investment Fund (ISIF) The ISIF fund through the NTMA has been active in property ?nance through it collaboration with KKR and has funding the purchase of some sites. notably part of the RTE lands with Cairn Homes. In more recent times it has been active in developing proposals to offer competitive financing for infrastructural works on large development sites. 1.5.5 Rebuilding Ireland In July 2016. the Government introduced the ?Rebuilding Ireland' action plan to increase new home construction (to 25.000 units per annum) and improve the rental sector. Key initiatives include: Major Urban Housing Development Sites (MUHDS) 23 sites within the greater Dublin area. Cork. Galway and Limerick have been identified as having the potential to deliver housing units quickly over four years through fast-track planning. This scheme has links with LIHAF with some infrastructural works funding from this. Local Infrastructure Housing Fund (LIHAF) This is a very positive and important initiative taken by the government through Rebuilding Ireland that is providing ?226m for enabling infrastructure on key sites to open up lands for development and accelerate the delivery of housing. It is envisaged that the infrastructure will be delivered by 2019 and the properties by 2021. 84 projects have been selected. where providing affordable housing is an important element. The aim is that this will provide for 23.000 residential units by 2021 and a further 46.000 in 15 years. Across Dublin. Cork. Limerick and Waterford. the following were selected (there were none in Galway): Lisney Residential Property - Irish City Regions 24 County Location LIDAF i MQHD 2021 Longer-Term Investment Site Dublin LBelmayne Clongriffin 11 ?3m Yes 620 . 780 Dodder Bridge - Poolbeg Peninsula ?15.75m Yes 1.500 1 1.5007 Cherrywood ?15.19m Yes 2.000 6.000 Clay Farm ?10.1m No 1.000 i - Kiltiernan Glenamuck ?10.5m Yes i 1.000 i - Woodbrook - Shanganagh ?4.15m Yes i 1.000 1.300 Baldoyle Stapolin ?6.1m Yes i 800 - Donabate Distributor Road ?15.5m Yes 1.200 1.000 Oldtown Mooretown ?4.9m Yes i 800 - Adamstown SDZ ?20m Yes 1.000 1.500 Clonburris SDZ ?3m No 1.000 7.000 Corkagh Grange ?4.39m Yes 1.000 i - Cork i Old Whitechurch Road ?9.9m Yes 600 - i South Docks ?15.5m Yes 700 - i Ballincollig ?7.4m Yes 520 3.500 Carigaline ?0.6m No 400 800 kGlanmire AM ?5.9m No 300 1.200 Midleton ?6.5m Yes 520 i 500 Limerick Greenpark ?4.93m Yes 400 700 Mungret ?10.5m No 450 2.250 Waterford Gracedieu ?1.32m N0 200 i - l?Kilbarry 7 i E339m 7 Ne - 450 _i 7 1.050 - i Ferrybank. Co Kilkenny i ?0.27m 200 4i - Given how successful LIHAF was. a second phase has been announced with ?50m to invest in infrastructure. Strategic Housing Development (SHD) SHD is fast track planning that was introduced in July 2017. It is for schemes with more than 100 units (and 200 student accommodation bed spaces). where applications can be submitted directly to An Bord Plean?la (ABP - the planning appeals board) and by-pass the local authority system. It involves a two stage process where in stage one. discussions are had between the applicant. ABP and the local authority for a six week period. Then applications move on to stage two where ABP takes 14 weeks to review proposals and make a decision. In the ?rst three months. ABP had 22 valid applications to stage one. which covered 6.000 housing units (3.600 houses and 2.400 apartments) in addition to 5.000 student accommodation bed-spaces. Three of these applications have moved on to stage two. notable 930 units at Clay Farm. 3.000 beds for students at U00 and 113 house in Beama in Galway. UCD has since been granted permission. albeit for fewer bed spaces. National Student Accommodation Stategy The Department of Education and Skills in conjunction with Rebuilding Ireland launched the strategy in July 2017. Its aim is to increase the number of student accommodation bed spaces by 7.000 by 2019 and by 21.000 by 2024. This is a very welcome development as it will free up over 7.000 apartments and houses that would normally be taken by students but will now be available to the general rental market. The majority of these will be in Dublin and to a lesser extent in the other cities. Lisney Residential Property - Irish City Regions State Lands InitiatiVe Rebuilding Ireland Housing Land Map This comprises a map on the Rebuilding Ireland website that shows all state. semi-state and local authority lands that are suitable for (re)development. State bodies may sell the lands or do joint ventures with builders through licences to get lands built on. The government envisages that up to 50.000 units could be provided through this. Home Building Finance Ireland (HBFI) HBFI is a ?750m finance vehicle for commercially viable projects at commercial rates for those ?nding it dif?cult to source funding. It was announced in Budget 2018. 1.5.6 Ireland 2040 Our Plan National Planning Framework (NPF) The ?nal version of the plan is due shortly and will be aligned to the 10 year Capital Investment Plan. Its aim is to guide planning and investment decisions up to 2040. It will look at how to have better regional growth and also focus on rural renewal. including policies on bringing back vacant buildings. The draft plan states that it is expected that the population will increase by 1m people by 2040 and this will mean that 25,000 new homes will be required annually and 600.000 will need to be created over the period. 1.5.7 New Apartment Regulations The ?nal version of the new apartment regulations are due shortly and will broaden the 2015 regulations. Changes that are likely to be made include having no minimum parking standards within 750m 1.000m of public transport nodes. and actually requiring developers to justify the need for parking in such schemes. It will also look at increased heights close to public transport nodes. There will likely be reference to more apartment types and layouts including studios. These are signi?cant changes and will assist in making apartment schemes viable to construct. A recent report by the Society of Chartered Surveyors (SCSI) showed that for a medium-rise (5 8 storeys) block of apartments in Dublin city centre. the cost of building a 2-bed unit was approximately ?470,000 and this fell short of the likely sales price by ?133.000. hence showing that schemes are often unviable. Much of the cost is tied into providing basement car parking and by reducing this. the viability improves. 1.5.8 Built?To?Rent The new apartment guidelines will also incorporate statutory guidelines on the build-to-rent sector. This sector is critical for providing more rental accommodation in the market and through professional landlords. The current requirements for apartments will likely be reduced to include not being required to provide dual aspect. increasing the number of units per core and permitting studio apartments. The government has said that it expects up to 5.000 build-to-rent apartments to be built in the coming years. Dublin. and indeed other cities, have not seen much build-to-rent construction and it may be that developers were waiting for the new regulations that will reduce the construction costs, and as with apartments generally will improve viability. 1.5.9 Vacant Site LeVy This was introduced a number of years ago in a bid to discourage land hoarding. The levy will commence in 2019 at a rate of 3% in that year and then for subsequent years. it will be charged at 7% per annum. It may have an impact on land values. which is positive for development viability and allowing for the quicker regeneration of lands. however. the legislation is not very prescriptive and there are ways in which landowners may become exempt from the tax. The seven year hold period for a Capital Gains Tax waiver was reduced to four years in Budget 2018 and those wishing to avail of the CGT holiday can now sell on properties and land. This is more likely to bring lands back to the market for sales in the short-term rather than the vacant site levy. Lisney Residential Property - Irish City Regions 26 1.6 International Comparisons 1.6.1 Competing Cities For an international comparison. set out below are average prices in various European cities. In addition, each city's population and the unemployment rates at the end of September 2017 are provided. The average wage shown comprises the net annual earnings at a country level. on, population $333323? Amie Level) (Country Level) Amsterdam 810,938 4.50% ?26,306 ?395,000 ?1,700 Barcelona 1,749,281 16.40% ?14,894 ?450,000 ?1,300 Belfast 136,500 4.40% ?26,860 ?137,000 Berlin 1,773,631 3.60% ?20,912 ?237,000 Cork 119,230 6.40% ?20,818 ?198,000 Dublin 554,554 6.40% ?20,818 ?414,000 ?1,600 Frankfurt 717,624 3.60% ?20,912 ?227,000 ?1,350 Galway 258,552 6.40% ?20,818 ?200,100 Geneva 191,557 5.00% ?48,481 ?871,000 Glasgow 598,830 8.40% ?26,860 ?143,000 ?1,000 Limerick 195,175 6.40% ?20,818 ?156,100 Liverpool 465,700 4.40% ?26,860 ?146,000 London 8,787,892 4.40% ?26,860 ?613,000 ?2,250 Luxembourg City 103,641 5.50% ?29,051 ?905,000 ?1,650 Manchester 541,300 4.40% ?26,860 ?194,000 ?1,150 Milan 1,360,422 10.60% ?16,036 ?320,000 ?1,600 Munich 1,430,000 3.60% ?20,912 ?403,000 Paris 2,240,681 9.30% ?35,484 ?676,000 ?2,000 Prague 1,259,000 2.80% ?6,290 ?297,000 Vienna 1,767,000 5.50% ?21,939 ?410,000 Waterford 53.500 6.40% ?20,818 ?143,000 Zurich 384,786 5.00% ?48,481 ?838,000 Source: Eurastat (Population, Unemployment Rate 8 Average Wage), Various individual country property sales 8 rental portals, Global Property Guide, CEPI members. Averagal'rice ?1,000,000 esmopoo (800,000 ?700,000 ?600,000 ?500,000 ?400,000 (300,000 (200,000 to eiz?z, stilt?: 0? 43?? ail V'Zavbooquw 99$" ?96 $9 V0 27 Llsney Residential Property Irish City Regions 1.6.2 Eurostat House Price Index The Eurostat House Price Index provides trends in house prices at EU and individual member level of newly built and existing residential properties. The latest quarterly figures for 02 2017 show that on an annual basis, average house prices increased by 3.8% and 4.4% in the Euro Area and the EU respectively. The largest price increase during the period was in Iceland, at 22%. while Italy recorded negative growth at 1.6.3 OECD Price to Income Ratio Price to Income Rule 23.13; 6 ?63. vex": 6?26"? ?@0909"? 69.} e" '9 gym); Us 0:1: a; we?? 3 \y 03 we? 4,5? fr ?7 {11.4qu a; n! n) 701 ?run!- to hum-u lath If rm'mtun- o} .?r?mddm?iry (1) Germany 91 201 NewZeovanG- or 1:1 nil 70:4 (J) Fam - 7019 Source: OECD On an annual basis, the OECD produces a ratio of nominal house price divided by nominal disposable income per head. This is a measure of house price affordability. The results as at 2016 (except where indicated) are set out below. 1.6.4 Price to Rent Ratio On an annual basis. the OECD produces a ratio of nominal house prices to rent prices. This measures the affordability of owning a house. mono Memo [?Mff?. 20 011' fv? Source: OECD Lisney Residential Property - Irish City Regions 28 29 1.7 Summary The Irish residential market has seen a significant change in underlying fundamentals in the past five years. Purchaser demand has increased considerably. which has led to price increases. Much of this growth offset the over-correction that occurred between 2007 and 2012 and was from a very low base. The average new housing supply need nationally each year. based on the 0805 population projections and assuming 2.5 persons per household is 27.250. Second hand supply nationally in November 2017 was 20.708. The national vacancy rate was 9.2% according to Census 2016. However. not all properties vacant are available for sale. The median sales price for all buyer types and all property types was ?325,000 in Dublin: ?190,000 in Cork; ?170.250 in Galway: ?145.000 in Limerick: and ?128.750 in Waterford. The average ?rst-time-buyer working couple uses 21.2% of their net income to fund a mortgage in Ireland. This was 32% in 2007. In a bid to slow down the pace of rising residential rents. rent pressure zones were introduced by the government. This limits annual rental growth to Average rents in each city region vary as follows Dublin at ?1,382: Cork at ?911: Galway at ?928: Limerick at ?743: and Waterford at ?630. In 2017. it is estimated that new home completions (based on ESB connections) will reach 18.000 units (approximately 85% homes and 15% apartments). This is an increase of 117% compared to 2013. The number of units under construction is growing. In Dublin. it increased by 34% in the 12 months to the end of September 2017 houses/ +18% apartments). Across Dublin. Cork. Galway. Limerick and Waterford there are 26.459 residential units (13.063 houses and 13.396 apartments) with planning permission but no construction has yet started. There are 6.921 residential units (2.921 houses and 4.000 apartments) in the planning system seeking permission. The Irish Government and regulatory bodies have introduced a number of policies in recent times relating to the housing market. These primarily comprise rules to reduce the pace of growth and others to increase new home supply. Some improvements are starting to be seen as a result. Lisney Residential Property - Irish City Regions Lisney Residential Property - Irish City Regions 30 02 31 Dublin 2.1 Sales Market 2.1.1 Overview The Dublin residential market remains very active. In the last two years approximately 2.5% and 2.9% respectively of the housing stock in Dublin was transacted (between 13,000 and 14,000 units annually). In 2017. figures are likely to be at a similar leveL For a market that has supply constraints. this is noteworthy as international evidence suggests that an optimal figure is between 3% and Signi?cant price increases were witnessed in 2014 and into 2015. However the introduction of the mortgage lending rules in 2015 did have the desired effect of taking some steam out of the market in certain sections and price inflation slowed. Price increases are evident. particularly for properties up to a value of ?500,000. This part of the market is dominated by ?rst-time-buyers and those wishing to trade down. The help-to-buy scheme is also impacting here by assisting first-time-buyers through a tax rebate of 5% if a newly constructed home is purchased. Apartments generally fall into this lower value category and those that are well located close to amenities and good transport links are well sought after and seen as a more affordable option by many who want to remain close to the city centre. The middle market (between ?500.000 and ?lm) mainly comprises those trading up. It is also active but is more restricted by supply constraints. the mortgage lending rules. and sales 'chains?. At the upper end of the market and for properties in excess of ?1m. it is property and buyer specific. Homes that are in turnkey condition can achieve a premium. while those requiring significant works Can take longer to sell. In the medium-term. we expect Dublin residential prices to continue to grow. albeit at a slower pace to recent years. The availability of new homes through the increase in building levels will have an impact on prices in areas where construction is ongoing. 2.1.2 Availability At the end of November 2017 there were 3.777 second hand properties for sale in Dublin. In terms of postal district. Dublin 15 accounted for the largest number of available properties with 351. while north and south county Dublin had 523 and 482 properties available. respectively. In terms of property type. three-bed houses were the most readily available at 1.128. followed by four-bed houses at 774. and two-bed apartments at 613. Supply of Previously Occupied Residential Units (End-November 2017) Dublin 2.673 921 3.777 Source: Usney. MyHome.ie. Daftie Taking the central business district of Dublin 1. Dublin 2. Dublin 3 and Dublin 4 there were 167 second-hand properties for sale. 149 of these were apartments. The vacancy rate (excluding holiday homes) across County Dublin in April 2016 (the most current official data). was Lisney Residential Property - Irish City Regions 2.1.3 Sales Prices Median prices for Dublin in the year to the end of September 2017. by buyer type (first-time-buyer, mover and investor). are given below at a county and Eircode level. The location with the highest median price range was Glenageary. Dublin 10 generally has the lowest median achieved pn'ces. Median Prices (Year to September 2017) Overall Dublin Median Price ?325,000 ?312,500 ?368,875 ?262,500 Source: 080 Median Prices - All Dwellings (Year to September 2017) County Eircode Location Median Price Dublin A94: Blackrock ?560,000 A96: Glenageary 001; Dublin 1 ?255,000 002' Dublin 2 ?350,000 D03: Dublin 3 ?360,000 004: Dublin 4 ?470,000 005: Dublin 5 006: Dublin 6 ?580,000 007: Dublin 7 ?278,000 008: Dublin 8 ?293,500 009: Dublin 9 ?336,000 010: Dublin 10 ?193,500 011: Dublin 11 ?220,663 012: Dublin 12 ?290,000 013: Dublin 13 ?333,500 014: Dublin 14 ?555,000 015: Dublin 15 016: Dublin 16 ?465,350 017: Dublin 17 ?211,750 018: Dublin 18 ?435,000 020: Dublin 20 ?294,500 022: Dublin 22 ?230,000 024: Dublin 24 ?293,001 06W: Dublin 6W ?580,000 K32: Balbn'ggan ?216,500 K34: Skerries ?325,000 K36: Malahide ?455,000 K45: Lusk ?250,500 K56: Rush ?268,500 K67: Swords ?290,000 K78: Lucan ?297,500 Source: 050 Lisney Residential Property - Irish City Regions Dublin Median Pnces 6230000 6230000 6301944 I 6301944- 6360000 - - 0470000 - 43470000 - 6625000 To provide a context of price trends over the last number of years. the chart below illustrates the median price achieved in Dublin from January 2010 to the end of September 2017 for first-time- buyers, movers and investors. Achieved Median Price in Dublin (January 2010 September 2017) Median Price ?400,000 ?350,000 - (300,000 (250,000 - CZ (ILOW 150,0?) CO 2010 2011 2013 201d 2015 2016 TO SI PT 2017 ?Movu Investor - - Overall Source: 080, Lisney 33 Llsney Residential Property Irish City Regions 2.2 Rental Market 2.2.1 Rental Prices The latest RTB data at the end of 02 2017 show that two and three-bed properties continue to make up around 69% of the total rental market stock in Ireland. It also shows that the index of overall Dublin rents increased by 5.8% on an annual basis. Analysing this further, Dublin houses increased by 2.6% in the 12 months. while apartments were up by The table below sets out one. two and three-bed average achieved rents in County Dublin and at local area level for detached. semi-detached and terraced houses. and apartments. In terms of property type. three-bed apartments achieved the highest rents in 02 2017. The postal district that achieved the highest average rent during the quarter was Dublin 2 for one. two and three-bed properties. The lowest achieved rent during the quarter was in Dublin 10, across one. two and three-bed properties. Average Achieved Rents (02 2017) 1 Detached House Semi-Detached Terraced House Apartment House . One-Bed - ?769 ?1,019 ?1,169 Two-Bed ?1,428 ?1,279 ?1,242 ?1,402 Three-Bed ?1,571 ?1,362 ?1,398 ?1,666 Source: RTB Average Achieved Rents (O2 2017) _County Posmode I One-Bed Two-Bed Three-Bed Dublin Dublin Overall ?1,095 ?1,365 ?1,435 Dublin 1 ?1,028 ?1,472 ?1,726 Dublin 2 ?1,292 ?1,818 ?2,244 Dublin 3 ?969 ?1,391 ?1,539 Dublin 4 ?1,266 ?1,768 ?2,114 Dublin 5 ?1,027 ?1,344 ?1,329 Dublin 6 ?972 ?1,495 ?1,863 Dublin 7 ?885 ?1,297 ?1,436 Dublin 8 ?1,061 ?1,352 ?1,517 Dublin 9 ?925 ?1,305 ?1,474 Dublin 10 ?913 ?1,113 ?1,156 Dublin 11 ?985 ?1,214 ?1,265 Dublin 12 ?969 ?1,284 ?1,328 Dublin 13 ?1,049 ?1,313 ?1,408 Dublin 14 ?1,201 ?1,544 ?1,830 Dublin 15 ?1,070 ?1,278 ?1,288 Dublin 16 ?1,222 ?1,515 ?1,586 Dublin 17 ?1,010 ?1,225 ?1,275 Dublin 18 ?1,373 ?1,593 ?1,755 Dublin 20 ?1,043 ?1,267 ?1,334 Dublin 22 ?1,010 ?1,134 ?1,174 Dublin 24 ?1,041 ?1,221 ?1,249 Lisney Residential Property - Irish City Regions 34 35 Dublin Cit . x- Du?ln Rants - I Bed!? 053 m: a I I15 .553.. 474.7455?: 01 Overall irish Market 1.1 Introduction The Irish residential market has seen a significant change in underlying fundamentals in the past six years. Purchaser demand has increased considerably since 2012. and with a shortage of available properties. most notably in urban centres. this has led to price inflation. In spite of this. prices remain 21% below their previous cycle peak (April 2007) nationally. The lack of supply in the sales market has also had an impact on the rental market. Rents have increased 43% from the bottom of the market. As a result. in December 2016. the government intervened and introduced rent predictability measures to limit increases. Residential construction indicators are more positive of late. suggesting a continued increase in activity will occur in the coming years. Data from the 080 shows that in the 12 months to the end of 01 2018. national residential completions increased by 42%. Commencement notices increased by 14% over the same period (but were 225% higher compared to the year to end-01 2013). In the year to March 2018. 24.531 residential units (17.603 houses and 6.928 apartments) were granted planning permission nationally. an increase of 37% annually. Compared to the 12 months to the end of March 2014. when only 6.495 units were granted permission. there is a 278% increase. which highlights the improvements that have been made in addressing the supply imbalance. albeit increases are from a low base. Residential Construction Summary Annual Change (01 2018) Comparison to 2013 Completions +42% 7? +225% (01 2013) Commencements +14% +85% (01 2015 1) Planning Permissions +37% +59% (01 2014) Source: 050, BCMS. These indicators. combined with robust Irish economic current and forecast variables. suggest a better functioning residential market in Ireland over the coming years. 1.2 Sales Market 1.2.1 Overview Following the collapse of the Irish residential property market in 2007. a new cycle of growth emerged in the latter part of 2012 in urban areas and in 2013 2014 in other locations. Since then. purchaser demand has continued to strengthen. most notably in large urban areas. and strong price inflation has occurred. While prices have risen by 76% nationally in the last six years. much of this growth offset the over- correction that occurred between 2007 and 2012 and was from a very low base. Over that period of decline. residential prices fell well below their replacement cost. to levels that were unsustainable in the longer-term. Also over that period. new home construction depleted dramatically with ESB BCMS data on commencement notices is only available from Mardi 2014. Lisney Residential Property - Irish City Regions connection levels (a proxy for completions) falling from over 93.000 units per annum nationally. to just 8.300 units at the lowest point in 2013. a 91% reduction? This resulted in a significant fall off in supply levels. As the economy started to improve and purchaser demand began to return to the market. more limited options were open to potential purchasers. Hence. prices grew due to increased competition for limited available stock (combined with a growing population). Residential Property Price Index (January 2005 April 2018) Index 140 120 100 so so 40 20 9, W9 ?mobv?od?m??o??wod? Source: 050. Lisney analysis We expect prices to continue to grow in the medium-term. albeit at a slower pace to that witnessed in recent years. This is due to the fact that the pace of new home construction has increased. and as more new home stock becomes available. the intense competition for available properties will lessen. This will be particularly notable in locations where there are good levels of new construction. In Dublin. there may be a levelling-off of price growth for a time. Combined with greater choice through new construction. this will also be due to the fact that asking prices are often not in line with affordability and what purchasers can realistically afford to pay. 1.2.2 Demand In terms of future demand for accommodation in Ireland generally and in the various city regions. reviewing likely population trends is important. In terms of reliable population projections. the 080 released ?gures in June 2018 (Population and Labour Force Projections 2017 2051). In addition to this. the Government released Project Ireland 2040 National Planning Framework in February 2018. This strategy sets out population targets for the various city regions and housing requirements. 050 Population and Labour Force Projections 2016 2051 The 080 has produced population projections up to 2051. We have applied these projections (based on the best-case scenario of high fertility and high migration M1F1)to the various counties" and then assumed 2.5 persons per household .thus showing an additional housing requirement over the years. The result is set out in the table opposite. 2 Of?cial ?gures from the 080 in relation to housing completions are only available from 01 2011. Prior to that, connections to electricity (ESB) is used as a proxy. This overstates the ?gures (during recession times by up to 45%, but less when market conditions are better} but it is the only other source of data available for historic comparison purposes and does show long-term trends. it should be noted that the C805 ?gures are at a national level and for the purpose of this report and for providing an indicative level of future demand, we have applied these national projections to the 2016 actual population ?gures for each individual county. The average household size in ireland was 2.7 persons in the 2016 Census. We have reduced this ?gure to 2.5 when calculating the implied housing demand due to the fact that the current household size could be considered to be in?ated because of housing shortages and adult children living with parents for longer. Additionally, the NPF anticipates that the household size will reduce to 2.5 persons. 8 Lisney Residential Property - Irish City Regions State Dublin Cork ealway Limerick Waterford implied implied implied Implied Implied implied Population m?l Population Population Population mm? Population ??rst Population m?l Need Need Need Need Need Need 2016 4.739.597 1.347.359 542888 259.059 194.899 118.176 2017 4.803.510 25.565 1365.528 7.288 550.189 2.928 261538 1392 197.527 1.051 117.743 627 2018 4.885.573 24.825 1383.171 7.057 557.297 2843 264.917 1.352 200.079 1.021 119.264 609 2019 4.926.992 24.568 1400.631 6.984 564.332 2.814 268.261 1338 202605 1.010 120.769 602 2020 4.997.719 24.291 1.417.994 6.905 571299 2.782 271568 1323 205.102 999 122.259 595 2021 5.047.468 23.900 1,434,980 6.794 579.131 2.737 274.921 1301 207.559 993 123.722 596 2022 5.106.294 23.530 1.451803 6.699 584.869 2.695 279.024 1.291 209.979 969 125.164 577 E3 5164.335 23.216 1469.102 6.600 591.517 2659 291194 1264 212.365 955 126.587 569 2024 5.221720 22.954 1494.416 6.525 599.090 2.629 284.308 1250 214.725 944 127.994 563 2025 5278.541 22728 1.500.568 6.461 604.599 2603 297.402 1.237 217.061 935 129.386 557 2026 5.334.939 22.559 1.516.601 6.413 611.058 2584 290.473 1.228 219.380 929 130.769 553 2027 5.390.912 22.390 1.532.513 6.365 617.469 2564 293.520 1.219 221.692 921 132.141 549 2029 5.446.707 22319 1.548.374 6.344 823.860 2.556 296.558 1.215 223.976 918 133.509 547 2029 5.502577 22.349 1564.257 6.353 630.259 2.560 299.600 . 1.217 226.274 919 134.978 549 2030 5.558.457 22352 1580.142 8.354 636.659 2560 302.643 1.217 228.572 919 136.248 548 2031 5.614.475 22.407 1596.067 6.370 643.076 2.566 305.693 1220 230.875 921 137.621 549 2032 5.670.581 22.442 1.612016 6.380 649.502 2571 308.748 1.222 233.182 923 138.996 550 2033 5.726.847 22.506 1.628.012 6.398 655.946 2.578 311.811 1.225 235.496 925 140.375 552 2034 5.783.289 22577 1.644.057 6.419 662411 2.586 314.984 1.229 237.817 928 141759 553 2035 5.839.816 . 22.611 1660.126 6.428 688.886 2590 317.962 1.231 240.142 930 143.144 554 2036 5.896.342 22610 1.676.195 6.429 675.360 2590 321.040 1.231 242466 930 144.530 554 2037_5.952.809 22587 1692.247 6.421 681829 2.597 324.114 1230 244.788 929 145.914 554 2038 . 6.009.183 . 22.550 1.708.273 6.410 699.295 2.583 327.183 1.228 247.106 927 147.296 553 2039 8.085.329 22.459 1724.234 6.384 694.716 2.572 330.240 1.223 249.415 924 148.672 550 2040 6.121.197 22.347 1740.116 6.353 701.u5 2560 333.292 1.217 251.712 919 150.041 548 2041 . 6.176.719 22.209 1755.900 6.313 707.474 2544 336.305 1209 253.996 913 151402 544 2042 6.231.851 22.053 1771573 6.269 713.789 2.526 339.307 1.201 256.263 907 152754 541 2043 6.286.482 21.852 1787.103 6.212 720.046 2503 342292 1190 259.509 899 154.093 536 2044 6.340.406 21.570 1802.432 6.132 726.223 2.471 345.218 1.174 260.727 997 155.415 529 2045 . 6.393.549 I 21.257 1.817.540 6.043 732310 2435 348.111 1.157 262.912 874 156.717 521 2046 . 6.445.899 . 20.940 1932422 5.953 738.306 2399 350.961 1 7 1140 265.065 961 159.001 513 2047 6.497.357 20.583 1847.050 5.851 744.200 2.358 353.763 1121 267.191 946 159.262 505 2049 8.547.880 I 20209 1.861.412 5.745 749.987 2.315 356.514 1100 289.259 931 180.500 495 2049 6.597.302 197881875462 5.620 755.647 2264 359.205 1076 271.290 813 161712 485 2050 6.645.635 19.333 1999.202 5.496 761193 2.214 361.837 1 1053 273.278 795 162.896 474 2051 6.692881 18.902 1902.636 5.374 766.596 2.165 364.409 i 1029 275.221 777 164.055 463 In summary. the following number of residential units are required to meet population growth. on average. each year based on the 0505 population forecasts and assuming 2.5 persons per household. This does not take account of the existing pent-up demand that is present due to under-construction in the last decade. Annual Average Housing Need National 22.323 Dublin i 6.346 Cork 2.557 Galway 1215 Limerick 41 918 Waterford 547 Samoa: 080, Lisney Analys's 7 Lisney Residential Property - Irish City Regions Project Ireland 2040 The National Planning Framework (further details included in section 1.5.6) also sets out population and housing demand estimates up to 2040. For Ireland as a whole. the projections included (produced by the ESRI) estimate that the population of Ireland will increase by about one million people (or over 2016 levels. to almost 5.7m people by 2040. For the ?ve city regions city and suburbs footprint). the following population targets have been set out. Targeted Population Increase 96 Increase Dublin City Suburbs 235.000 to 290.000 20 25% - Cork City Suburbs 105.000 to 125.000 50 - 60% Galway City Suburbs 40.000 to 45.000 50 60% Limerick City Suburbs 50.000 to 55.000 50 - 60% Waterford City Suburbs 30.000 to 35.000 50 60% Nationwide 1.000.000 20% Nationally. according to the NPF. this would give rise to a need for at least an additional 500.000 new homes by 2040. Between 2018 and 2040. an average output of at least 25.000 new home per year are envisaged as required. But the NPF also states that achieving this level of supply will require increased hOUSing output into the 20205 to deal with the de?cit that has built up since 2010. To meet projected population and economic growth as well as increased household formation. annual housing output will need to increase to 30.000 to 35.000 homes per annum up to the year 2027 and will be subject to monitoring and review. In the cities. according to the NPF. the Housing Agency has identified an aggregate need for at least 45.000 new homes in Dublin. Cork. Limerick. Galway and Waterford up to 2020. 30.000 of which are required in Dublin city and suburbs. In the longer term to 2040. there will be a need for provision of at least 275.000 new homes in the cities. with half of these located in existing built-up areas. Others In addition to the above. van'OUS commentators and organisations have put forward housing requirements. These can be summarised as follows: 40.000 45.000 units per annum required Daftie . nationally In the comlng years 30.000 units per annum minimum Goodbody . requnrement ESRI 27,000 units in 2018 and up to 28.000 units per annum by 2020 Department Housing Planning Local Government 25.000 units per annum minimum (Rebuilding Ireland) requirement to 2021 Construction Industry Federation 24.000 units per annum Lisney Residential Property - Irish City Regions With the CSO's 2018 population forecasts implying an average annual need for 22.300 units: the NPF suggesting an average of 25,000 units per annum (but frontloaded to 30,000 per annum in the next 10 years); and the above ranging generally between 24.000 and 30.000 units (with one outlier at 40.000 to 45,000). it is reasonable to assume a requirement of 25.000 per annum on average in the long-term but with additional units required in the short-term. perhaps up to 30.000 annually. We believe that across the entire of Dublin. the future housing need will be split 50/50 between houses and apartments. However. in Dublin city centre it will be almost exclusively apartments. In other city regions. the split is more likely to be 75/25 houses to apartments. 1.2.3 Availability While the number of previously occupied properties second?hand) for sale remains at relatively low levels. new homes schemes are now starting to produce additional supply. which is adding to availability. Focusing on the previously occupied section of the market second-hand homes). the number of properties available for sale at the end of June 2018 in each of the key counties is set out below. While these supply ?gures are below optimum levels. they are higher than the lowest level reached in the latter part of 2016 and have increased by 23% overall in the quarter houses +26% apartments). This clearly indicates that there is now greater choice available for potential purchasers than there was three months ago. Supply of Previously Occupied Residential Units (End-June 2018) County 1 Houses I Apartments 1 Total Dublin 3,706 1,406 5.112 Cork - 3,150 i 189? 'i 3.339 7 Ggway 1.281 . 137 1.418 Limerick I 965 . 101 I 1066 Waterford 609 33 642 Nationwide 23 .227 2.670 25.897 Source: Lisney. Daftie. MyHome.ie Lisney Residential Property - Irish City Regions It is not possible to accurately track the number of new build units that are available as many are sold prior to completion or the sales process does not complete. However. there are about 500 individual schemes on the market at present across Ireland. Set out below are some high?profile schemes in each of the counties. There were about 160 new homes schemes on the market at the end of June 2018 in County Dublin. Dubun Clay Farm. Leopardstown, Dublin 18 Marianella, Rathgar, Dublin 6 i Lansdowne Place. Dublin 4 Grace Park Wood, Drumcondra. Dublin 9 Scholarstown Wood. Rathfarnham. Dublin 16 Llsney Residential Property Irish City Regions Phase 1: - 410 houses Phase 2: 800 houses - 5 houses - 180 apartments - 200 apartments (high end) - 100+ houses . 314 houses 10 11 Shackleton Park, Lucan, Co. Dublin • 267 houses Cúil Dúin, Citywest, Co. Dublin • 236 houses The Park, Hansfield Wood, Dublin 15 • 219 houses St. Helens, Adamstown, Co. Dublin • 177 houses Ashfield, Ridgewood, Swords, Co. Dublin • 173 houses Lisney Residential Property - Irish City Regions Cork There were 58 new homes schemes on the market at the end of June 2018 in Co Cork. Botanika. 31 houses Blackrock. Co. Cork Rose?eld. 20 houses Model Farm Road. Model Farm Road. Co. Cork Eden. . 16 units Blackrock, Cork PP sought for 147 units Foxwarren, 28 houses Moneygourney. Douglas. Co. Cork IBlackrock House. 37 apartments Blackrock. Co. Cork Llsney Residential Property Irish City Regions 13 Galway There were 15 new homes schemes on the market at the end of June 2018 in Co. Galway. Gort an Duin. Oranhill. Oranmore, Oranmore, Co Galway Gleannt?n Na hAbhann, Craughwell. Co Galway Rossallta, Rosshill Road. Galway. Co. Galway CL?iirt Ch?irl'n. Circular Road, Bushypark, Galway. Co. Galway I Ceathru an Tobar. Oranmore, Co. Galway Phase 58 houses - 22 houses - 16 houses 6 houses . 23 houses Lisney Residential Property - Irish City Regions Limerick There were just 11 new homes schemes on the market at the end of June 2018 in Co Limerick. Bloomfield. 150 houses Annacotty. Co. Limerick Caislean na hAbhainn, Phase Castletroy. Co. Limerick . 35 houses Ros M?r, Phase The Meadows. Ballyneety, 160 houses Co. Limerick Evanwood, 36 houses Golf Links Road. Castletroy. Co. Limerick Templeville, 42 houses Ballinacurra Road. Punches Cross. Co. Limerick Lisney Residential Property - Irish City Regions 14 15 Waterford There were just 8 new homes schemes on the market at the end of June 2018 in Co Waterford. Castlekeep, 18 houses Friars Walk. Abbeyside, Dungarvan. Co Waterford Cluain L?rach. Phase 4: Knockenduff. Tramore. Co Waterford - 23 houses Mount?eld. 60 houses New Development Tramore. Tramore. Co Waterford . Cluain na Si. . - 15 houses Ring. Co Waterford . St. James Wood. 0 14 houses Stradbally. Co. Waterford Llsney Residential Property Irish City Regions 1.2.4 Vacancy Rates Official data on current vacancy rates in Ireland is not available and plotting availability against housing stock does not provide an accurate result as many vacant properties are not for sale for various reasons. However, findings from Census 2016 provide some indications, albeit dated. 0n Census night in April 2016. the housing stock nationally stood at 2.003.645 dwellings. A total of 183,312 units were categorised as vacant. leaving the national vacancy rate at 9.2% (excluding holiday homes). There were significant variations in the vacancy rate between locations with Dublin having the lowest rate at Cork at Galway at 11.1%, Limerick at and Waterford at We are of the opinion that these rates are now significantly less. Vacancy Rate Excluding Holiday Homes (April 2016) Vacancy Rate 1 2 00? 11..on 9.90% 10 no a 93'0" max s. was 811116 5.90% cum 4 .m913 2 .m Dublin (on: {Jamey Lumendx Watenord National Average- Source: C30. Lisney Analysis 1.2.5 Sales Prices Achieved sales prices across the country vary considerably with Dublin levels significantly ahead of the other city regions. Set out below are the median5 prices achieved for the year to the end of April 2018. This is split by buyer type (first-time-buyer. mover and investor) to show the variance between the different categories of purchaser. and also by the nature of the property (new or previously occupied). There is no clear trend on buyer type and their capacity to spend. As can be seen, movers those trading up or down) have the capacity to spend the largest amount on homes in Dublin and Cork, while investors compete at the lower end of the market. In other city regions, first?time? buyers are the largest spenders. followed by movers and then investors. In terms of property type, over the year, newly built homes achieved higher prices than those previously occupied. Median Prices by Buyer Type (12 Months Median to April 2018) County All Buyer Types FIrst-Time-Buyer Mover Investor Dublin ?338,750 ?322.500 ?375,900 ?262,700 Cork ?197,000 ?217,000 ?219,500 ?122,500 Galway ?177,500 ?194,750 ?190,000 ?135,150 Limerick ?152,500 ?188,000 ?158,750 ?96,600 Waterford ?130.900 ?183,700 ?160,000 ?84.250 Source: 080. Lisney Analysis 5 Given the relatively small nature of some parts of the Irish property market, the calculation of average prices can be distorted by very large or very small sales prices, i.e. outliers. As such. the median price is a more accurate measure. Lisney Residential Property - Irish City Regions 16 17 Median Prices by Nature of Property (12 Months Median to April 2018) County All Property Types Previously Occupied Newly Built Dublin ?338,750 ?321,000 ?382,000 Cork ?197,000 ?184,000 ?317,500 Galway ?177,500 ?174,750 ?242,250 Limerick ?152,500 ?143,750 ?228,700 Waterford ?130,900 ?120,250 ?201,700 Source: 080, Lisney To provide some context to the current median pricing levels above, the chart below shows the trend in median prices since 2010 for all property types. Median Prices All Property Types (2010 2017) Median Price ?350,000 ?300,000 6 ?50,000 200000 150,000 - 100,000 {50,000 (0 Dublin l.mk belwaY Limeaitk We Irrfor .2010 .2011 2012 .2013 '2014 '2015 02016 .2017 Source: 030, Lisney Analysis 1.2.6 Affordability The most recent EBS DKM Irish Housing Affordability Index for May 2017, showed that nationally, a working couple who are first-time-buyers use 21.2% of their net income to fund a mortgage. In Dublin the ?gure for a couple under the same scenario is 27.6%. To put this in context, during the boom years of the last property cycle, the national figure was 32%, while in Dublin the rate stood at 42.7% (December 2007). As such, properties are signi?cantly more affordable now compared to that time. 1.2.7 Mortgage Lending The Irish mortgage market has witnessed a notable uplift in activity since early 2014 and again in the past two years. The total number of drawdowns in the 12 months to the end of 01 2018 was up by 15% in volume terms and 26% in value terms. The first-time-buyer cohort is driving market activity and currently accounts for half of all mortgage drawdowns. Mover purchasers make up 30% of drawdowns, while investor mortgages account for The remaining 16% of market activity relates to re-mortgages and top-ups. Llsney Residential Property Irish City Regions When re-mortgages and top-ups are removed. the number of new mortgage activity increased by 15% in volume terms in the year to end-March 2018 and by 25% in value terms. New mortgage lending has increased steadily in annual terms since its lowest level in 01 2012. Number of New Mortgages* 12 Month Rolling Total (01 2012 01 2018) No. New Mommas 35.010 snow 25.000 . Resldortlal Investment 23.030 Ls Itlng 1500:) IIvaar Purchaser 10.000 - Hist-time Buyer Pudmser 50(1) 99% a? ave Source: Banking 8 Payments Federation of Ireland, Lisney analysis ?Excludes re-mortgages and top-ups. 1.3 Rental Market 1.3.1 Context The Irish rental market remains exceptionally active. Supply is tight in many areas and rents have risen rapidly in recent years. Nationally. overall rents have grown by 43% (35% houses and 48% apartments). This is due to various factors including changing demographics: an inability by many to obtain a mortgage as a result of the recession years limiting savings and hence remaining in the rental sector for longer. private landlords moving out of the market due to increased regulation and costs resulting in a declining level of supply from this cohort: and a general lack of construction again limiting supply. In a bid to address n'sing rents. the government introduced rent predictability measures in the last two years. In a rent pressure zone. annual increases are limited to 4% while outside of these areas. rents can only be reviewed every two years (see section 1.54). These rent predictability measures have given certainty to both landlords and tenants in areas where rents have increased rapidly in recent years. Ultimately. they assist in delivering more affordable accommodation solutions by providing predicable price increases. The Government is also seeking to improve the functioning of the rental sector more generally and in particular. expanding the build-to-rent sector. The aim is to improve the supply of homes at affordable rents. In terms of build-to-rent. this is a sector of the market that did not traditionally exist in Ireland. However. its benefits in terms of better on-site facilities for tenants and more professional estate management means it is potentially more suitable for longer-term tenant occupancy. In Dublin. it has also become evident in recent months that many of the apartment schemes under construction have been bought or are likely to be bought by professional landlords funds to be operated as PRS (private rented sector) schemes. and have not been sold unit by unit. The latest RTB data at the end of 04 2017 show that two and three-bed properties continue to make up around 69% of the total rental market stock in Ireland. Lisney Residential Property - Irish City Regions 18 19 1.3.2 Rental Prices The Residential Tenancies BOard (RTB) registers and tracks details of all residential rentals in Ireland. Set out below are average achieved rents across all property types and sizes in each of the counties. Average Achieved Rents (01 2018) County All Property Types Dublin 436 Cork ?948 Galway ?956 Limerick ?812 Waterford ?674 Source: RTB Further analysis based on the number of bedrooms and nature of the accommodations is set out below. One-Bed Average Achieved Rents (01 2018) County I Detached House Semi-Detached House Terraced House I Apartment Dublin - ?881 ?1113 ?1,232 Cork ?642 ?657 ?786 ?776 Galway ?614 ?657 - ?725 Limerick - - - ?593 Waterford - - ?563 ?550 Source: RTB Two-Bed Average Achieved Rents (01 2018) County I Detached House Semi-Detached House Terraced House I Apartment Dublin ?1,372 ?1371 ?1,297 Cork ?728 ?874 ?886 ?991 Galway ?686 ?742 ?867 ?935 Limerick ?581 ?683 ?656 ?771 Waterford ?586 ?616 ?609 ?646 Source: RTB Three-Bed Average Achieved Rents (01 2018) County 1 Detached House i Semi-Detached House Terraced House I Apartment Dublin ?1,610 ?1,417 ?1,441 ?1,731 Cork ?854 ?946 ?954 ?1,183 Galway ?766 ?887 ?956 ?1,162 Limerick ?687 ?808 ?787 ?858 Waterford ?709 ?729 ?689 ?692 Source: RTB Lisney Residential Property Irish City Regions 1.4 Residential Construction Pipeline 1.4.1 Completions Based on 050 data. 15,193 units (85% houses/ 15% apartments) were completed in the 12 months to the end of March 2018.8 This compares to just 10,726 in the same period a year previous. a 42% increase. The lowest point of the cycle was in 2013 when just 4,575 units were completed. This means that since then. annual completions have grown by 225%. Residential Construction Nationwide (2011 01 2018) No. Unlts Completed 18.000 14000 12,011) 10000 0.011) 0.000 4000] -- 2.0m] I: 2011 2012 2013 2014 I 2015 2016 2017 I 012010 Source: CS 0. Usney Analysis The completion figures for the 12 months to end-March 2018 are shown at county level in the table below. Number of Units Constructed (12-Months to End-01 2018) County I House Apartments Total Dublin 3,953 69% 1.810 1 31% 5.763 i Cork 1,381 94% 95 I 6% 1.476 Galway 636 94% 40 I 6% 676 Limerick 511 98% 12 2% 523 Waterford 269 i 94% 18 6% 287 Nationwide 12.928 I 85% 2.265 15% . 15.193 Source: 080. Usney analysis 1.4.2 Commencement Notices The total number of units under construction in new homes schemes (with greater than 10 units) varies across regions with Dublin having the greatest number of units under construction. The table below shows the number of units under construction at the end of 01 2018. In Dublin. at the end of 01 2018. there were 7.353 units under construction. Historically, housing completion ?gures were based on electricity connections and recorded without any reference to units that were re-connections. The 080 has done some work on this and during 02 2018, released its ?rst publication with accurate housing completion ?gures. This only dates from 01 2011 and as such, any longer-term trends (back to 19 70) must still be reviewed by reference to the ESB data. Lisney Residential Property - Irish City Regions 20 21 1.4.3 Under Construction The total number of units under construction in new homes schemes (with greater than 10 units) varies across regions with Dublin having the greatest number of units under construction. The table below shows the number of units under construction at the end of 01 2018. In Dublin. at the end of 01 2018. there were 7.353 units under construction. Number of Units Under Construction County I Houses Apartments Units Dublin 3,724 3.629 7.353 Cork - - 2.798 Galway - - 635 Limerick - - 613 Waterford - - 536 Source: 015 1.4.4 Planning Granted Set out below is the total number of units across each location with planning permission granted but not yet commenced. Number of Units with Planning Permission County Houses Apartments Total Dublin 9.465 15.588 25.053 Cork - - 3.486 Galway - - 641 Jnerick - - 709 Waterford - - 354 Source: 1.4.5 Planning Submitted The total number of units across each location with planning permission submitted but as of yet neither granted nor refused. Number of Units with Planning Applications Submitted County Houses Apartments Total Dublin 2,750 5.402 8.152 Cork - - 1.621 Galway - - 438 Limerick - - 452 Waterford - - 224 Source: Lisney Residential Property Irish City Regions 1.5 Housing Policy The Irish Government and regulatory bodies have introduced a number of policies in recent times relating to the housing market. These primarily comprise rules to reduce the pace of growth and others to increase new home supply. Some of the notable introductions are detailed below. 1.5.1 Central Bank of Ireland Macro-Prudential Rules The Central Bank of Ireland introduced macro-prudential mortgage market regulations in February 2015. Prior to this there were no limits on how much banks could lend to home buyers. The aim of the rules was to enhance the resilience of both borrowers and the banking sector. and to reduce the risk of spiralling house price due to easy access to finance. The rules were amended in January and November 2017. with the main details of the framework as follows: Loan-To-lncome Loan-To-Value First-Time- 3.5 gross 20% of all FTB mortgages 90% loan 5% of all mortgages can Buyer income can exceed this limit per year (Le. 10% deposit) exceed this limit per year Mover 3.5 gross 10% of all MP mortgages can I 80% loan 20% of all FTB mortgages can Purchaser income exceed this limit per year (Le. 20% deposit) exceed this limit per year i Investor No income . 70% loan . 10% of mortgages can exceed limits (Le. 30% dep05it) this limit per year 1.5.2 Rent Predictability Measures In a bid to address rising rents. the government introduced a number of measures in recent years. In 2015. temporary measures were introduced whereby a landlord could only review rent every two years (traditionally reviews occurred annually). There are exceptions to this. mainly where a property has been substantially upgraded or if it is in a rent pressure zone (RPZ). In relation to the latter. RPZs (which includes all of Dublin and the surrounding commuter towns. in addition to Cork and Galway cities and suburbs) came into effect at the end of 2016 for a three-year period. The aim of this was to provide rent predictability. whereby rental increases in the designated areas were capped at 4% per annum for three years. This means that outside of the RPZs (such as Limerick and Waterford) rents can only be reviewed every two years to market rates. Within rent pressure zones. rents can be reviewed annually but capped at These measures have had some impact on rents in recent months. For example. the pace of growth in rents for apartments in Dublin has fallen from about 12% per annum throughout 2016 to an annual rate of 4% at the end of 2017. Outside of the greater Dublin area. the annual rate has fallen from 9% to 1.5.3 Help-To-Buy Budget 2017 (in October 2016) introduced the 'Help-to-Buy Inoentive'. This scheme allows first-time- buyers to obtain an income tax rebate of 5% of the purchase price of a newly built house or apartment. The maximum relief that can be claimed is ?20.000 and no relief can be claimed on previously occupied properties. The aim of this scheme is to increase demand for newly built homes and hence encourage developers to increase construction levels. The government envisage that this scheme will cast about ?50m per annum. The scheme has been successful in bringing forward purchases due to lower deposit requirements. which in turn has given developers con?dence and encouraged construction in certain parts of the market In the latter part of 2017. there was concern that the scheme was causing price increases. However. since the scheme commenced in July 2016 (Budget 2017 backdated it). only 6% of all sales nationally were to ?rst-time-buyers purchasing a new home. As such. this is not having as significant effect on the nationwide market as some thought. Additionally. it should be noted that the median price of a new home nationally has grown by 14% since the scheme commenced while median prices for the market overall have grown by 15%. which means both are relatively in line. Lisney Residential Property - Irish City Regions 22 23 1.5.4 Date Mar-15 Jul-15 Nov-15 Mar-16 Apr?16 Dec-16 Sap-17 Feb-18 1.5.5 Ireland Strategic Investment Fund (ISIF) The ISIF fund through the NTMA has been active in property-related ?nance since 2015. To date. commitments have been given on the following:. Company Kilkenny County Council Activate Capital Quadrant REA Ardstone Homes DCU Finegrain Hines Man Aalto i TOTAL Rebuilding Ireland Investment ?12.000.000 ?325.000.000 ?100.000.000 ?30.000.000 ?230.000.000 ?25.000.000 ?51.700.000 925.000.000 ?798,700.000 Details Seed investment for town centre urban regeneration - two Brewery Site buildings ?325m commitment to a ?500m platform for residential development] includes ?50m to Cairn Homes on RTE site purchase Between ?50m and ?100m debt platform for commercial development Deliver of new starter homes Infrastructure for PBSA Equity investment to provid ind ustrial property Senior debt commitment to fund infrastructure at Cherrywood Loan finance to residential builders on smaller-scale schemes with the aim of delivering 330 new homes. In July 2016. the Government introduced the 'Rebuilding Ireland' action plan to increase new home construction (to 25.000 units per annum) and improve the rental sector. Key initiatives include: Major Urban Housing Development Sites (MUHDS) 23 sites within the greater Dublin area. Cork. Galway and Limerick have been identi?ed as having the potential to deliver housing units quickly over four years through fast-track planning. This scheme has links with LIHAF with some infrastructural works funding from this. Local Infrastructure Housing Fund (LIHAF) This is a very positive and important initiative taken by the government through Rebuilding Ireland that is providing ?226m for enabling infrastructure on key sites to open up lands for development and accelerate the delivery of housing. It is envisaged that the infrastructure will be delivered by 2019 and the properties by 2021. 30 projects have been selected across Ireland. where providing affordable housing is an important element. Four additional projects have been side-lined due to lack of agreement between local authorities and developers on the amount of affordable housing to be provided. The aim is that this will provide for 23,000 residential units by 2021 and a further 46.000 in 15 years. Across Dublin. Cork. Limerick and Waterford. the following were selected (there were none in Galway): Lisney Residential Property - Irish City Regions i LIDAF MUHD County Location i 2021 Longer-Term 1 Investment 1 Site Belmayne Clongriffin a 7 ?3m Yes 850 760 Dodder Bridge - Poolbeg Peninsula ?15.75m Yes 1.500 1.500 _Cherrywood a 7?15.19m 7 Yes 2.000 6.000 Clay Farm ?4.7m No 350 Woodbrook - Shanganagh ?4.16m Yes 1.242 1.300 Dublin BaldoYle Stapolin ?6.18m Yes 500 - _Donabate Distributor Road ?14.16m Yes l_ 1.200 _l 1.000 OLdtown Mooretown ?4.9m Yes 800 - fdamstown SDZ ?20m7 Yes A 1 2.000 A 1.500 7 Clonburris SDZ ?3m I No 1.000 7.000 Corkagh Grange ?4.39m Yes 1.000 - WOlid Whihechurch Road a 7 ?9.South Docks ?15.5m Yes i 620 - Cork Carigaline ?0.6m No 400 800 Glanmire ?5.9m No 300 1.200 Midleton _?5.51 Yes 520? 500 Limerick Mungret ?10.5m No 401 2.250 Gracedieu ?1.32m No 238 - Waterford Kllbarry ?3.39m No 400 i 1.050 Given how successful LIHAF was. a second phase has been announced with ?50m to invest in infrastructure. Strategic Housing DeVelopment (SHD) SHD is fast track planning that was introduced in July 2017. It is for schemes with more than 100 residential units (and 200 student accommodation bed spaces). where applications can be submitted directly to An Bord Pleanala (ABP - the planning appeals board) and by-pass the local authority system. It involves a tvvo-stage process where in stage one. discussions are bad between the applicant. ABP and the local authority for a six-week period. Then applications move on to stage two where ABP takes 14 weeks to review proposals and make a decision. Since this was introduced in July 2017. there have been applications for 13.220 units (3.496 apartments. 4.103 houses and 5.621 bed spaces). 6.824 units have been granted permission with 2.139 refused and 4.257 still being reviewed. Apartments Current Applications 1.927 Granted 964 Refused 605 Total 3.496 Source: An Bord Pleandla. Lisney analysis National Student Accommodation Strategy Houses 1.153 2.244 706 4.103 PBSA 1.177 3.616 828 5.621 Total 4.257 6.824 2.139 13.220 The Department of Education and Skills in conjunction with Rebuilding Ireland launched the strategy in July 2017 and a progress report was issued in April 2018. The aim of the strategy is to increase the number of student accommodation bed spaces by 7.000 by 2019 and by 21.000 by 2024. This is a very welcome development as it will free up over 7.000 apartments and houses that would normally be taken by students HMOs - homes in multiple occupancy) but will now be available to the general rental market. The majority of these will be in Dublin and to a lesser extent in Cork. Galway and the other cities. Lisney Residential Property - Irish City Regions 24 25 State Lands InitiatiVe - Rebuilding Ireland Housing Land Map This comprises a map on the Rebuilding Ireland website that shows all state. semi-state and local authority lands that are suitable for (re)development. State bodies may sell the lands or do joint ventures with builders through licences to get lands built on. The government envisages that up to 50.000 units could be provided through this. Home Building Finance Ireland (HBFI) HBFI is a ?750m ?nance vehicle for commercially viable projects at commercial rates for those ?nding it difficult to source funding. It was announced in Budget 2018 and is estimated to assist with 6.000 new homes. This scheme has been slow to come on stream. but it has been reported that funds will be available by the end of 2018. 1.5.6 Project Ireland 2040 Launched in February 2018. Project Ireland 2040 comprises two parts: the National Planning Framework (NPF) up to 2040 and the 10-year National Development Plan 2018 2027 (NDP). The NPF is a spatial strategy for Ireland. the aim of which is to accommodate demographic changes across the regions. while the NDP is an infrastructural investment programme supporting the NPF. There are 10 national strategic outcomes identified. which comprise: 1. Compact growth In both urban and rural settlements supported by jobs. houses and services - 25.000 homes per annum by 2020 and 35.000 per annum up to 2027 - 112.000 social houses in 10 years ?2bn urban regeneration and development fund sustainable growth in the ?ve cities and large urban centres 40% of future housing in existing built up areas (ie brownfield regeneration sites) ?National Regeneration and Development Agency' co-ordination and management of development lands 2. Enhanced regional accessibility - Particular focus on the northwest - Linking regional and urban centres to each other (and notjust Dublin) - Linking 'Atlantic Corridor' Cork. Limerick. Galway and Sligo - Investment in inter-urban rail network and bus services 3. Strengthened rural economies and communities Grow the three regions at broadly the same rates northern/western: southern; eastern/ midland (including Dublin) - 75% of future population growth will be outside of Dublin - ?Rural Regeneration and Development Fund' of ?1bn - Delivery of the 'National Broadband Strategy' - Regional and local roads. tourism development. greenways. agricultural. etc 4. Sustainable mobility - Environmentally sustainable public transport system to meet the increases in travel demand - Move away from carbon-intensive systems - Will include the Metro. DART expansion and ?Bus Connects' programme - Improved cycling and walking facilities Lisney Residential Property - Irish City Regions 7. A strong economy, supported by enterprise, innovation and skills Extra 660,000 jobs by 2040 Goal is to achieve sustainable full employment bring regional unemployment to within 1% of national figure Retain competitiveness for FDI attraction but also focus on local enterprise economy ?500m 'Dismptive Technologies Innovation Fund' for collaboration between research. education and enterprise High-quality international connectivity Investment in ports and airports Second runway at Dublin Airport. continued development at Cork and Shannon airports, investment at Knock airport Connectivity between ports Enhanced amenity and heritage High quality infrastructure is needed for vibrant culture and heritage Pursue the ?Creative Ireland Programme' with targeted investment New cultural infrastructure plan in next 10 years Investment through the Sport Capital Programme Transition to low carbon and climate resilient society Significant reduction in carbon emissions up to 2030 Upgrading 45,000 homes per annum from 2021 Greater volumes of renewable energy. renewable heat support. low emission and electric buses North-south and the celtic interconnectors Conversion of Moneypoint to electricity ?500m 'Climate Action Fund' focus on interventions in the transport sector Investment in flood relief schemes Sustainable management of water and other environmental resources Investment in water and wastewater infrastructure Priority is a new water supply source for the eastern and midland region Waste efficiency 10. Access to quality childcare, edUcation and health services Relative to the size of the region. city or town Immediate actions in education to respond to the growing population 50 new large scale schools projects annually to 2021 Additional 15.000 school places annually Increased capacity in the institutes of technology Increase in post-graduate and post-doctoral places Sustained capital investment in school system to respond to changes in the curriculum and technological developments Investment in health infrastructure move towards community care but with high quality acute and emergency care in appropriate hospitals will include completion of the national hospital projects underway Lisney Residential Property - Irish City Regions 26 27 Stemming from of these strategic outcomes. are also strategic inVestment priorities which are: National road network Rural development Airports and ports Climate action Water Infrastructure 9 Culture. heritage and sport Housing and sustainable urban development Environmentally sustainable public transport Enterprise. skills and innovation capacity Education. health and childcare The NPF states that a regional dominance approach is not realistic or implementable given the signi?cance of Dublin and would result in a diminished scale of overall national development. Consequently. regional parity is considered more credible. reasonable and viable whereby the targeted growth of the Northern and Western and Southern Regional Assembly areas combined would exceed that projected under a business as usual scenario and would at least equate to that projected for the Eastern and Midland Region. The NPF target for growing regions is as follows: Region Eastern Midland Region (Dublin. Wicklow. Kildare. Laois. Offaly. Westmeath. Longford. Meath, Louth) Northem Western Region (Donegal. Sligo. Mayo. Galway. Roscommon. Leitrim. Cavan. Monaghan) Southern Region (Clare. Limerick. Kerry. Cork. Waterford. Tipperary. Kilkenny. Carlow. Wexford) Population Increase 490.000 540.000 160.000 180.000 340.000 380.000 Employment i Increase 320.000 115.000 225.000 Housing 50% of new housing within Dublin city and suburbs footprint. i 30% of all new housing elsewhere but within the existing urban footprint. 50% of new housing within Galway city and suburbs footprint. 30% of all new housing elsewhere but within the existing urban footprint. 50% of new housing within existing Cork. Limerick and Waterford cities and suburbs footprint. 30% of all new housing elsewhere but within the existing urban footprint. Lisney Residential Property - Irish City Regions 1.5.7 New Apartment Regulations In March 2018. the Department of Housing. Planning and Local Government issued its ?nal planning guidelines on new apartment developments called Sustainable Urban Housing: Design Standards for New Apartments Guidelines for Planning Authorities. Within this. aspects of the previous 2015 guidelines have been amended and new areas have been addressed to better reflect contemporary household formation and housing demand patterns in urban areas. This includes removing requirements for car parking in certain circumstances where transport nodes are close by. The guidelines also address the emerging sectors of ?build-to-rent' and 'shared professional accommodation?. The measures of note contained in the guidelines include: - Developments may include up to 50% one-bed or studio units (no more than 25% studios) and there are no minimum requirements for schemes to have three or more bedrooms. - The minimum apartment floor areas are set out. These do not apply to purpose built student accommodation. Studio Apartment (1 Person) 37 l-B?ed Apartment (2 Persons) 45 2?Bed Apartment (4 Persons) 73 3-Bed Apartment (5 Persons) 90 At least 33% of units mUSt be dual aspect in urban lOCations while in suburban locations at least 50% must be dual aspect. For building refurbishment schemes or on small infill sites. the number of dual aspect units will be judged on a case by case basis and may be less than one- third. The maximum number of units per core is increased to 12 from eight. and can be higher for refurbishment and small infill schemes. There are provisions for general internal storage and utility (within the minimum floor areas). in addition to storage for bulky items outside of individual units (at ground or basement level that are excluded from the minimum floor areas). - All apartments are required to include private amenity space in the form of gardens or patios/ terraces for ground floor apartments and balconies (at least 1.5m deep) at upper levels. These must adjoin the main living area. There are additional requirements for communal amenity space within each scheme. - Adequate bicycle parking and security is required and this must be directly accessible from the public road or from a shared priVate area that has access to a public road. Car parking: - In large scale and high density schemes in central locations that are well served by public transport (15 minute walk to city centre 10 minuteS to rail 5 minutes to high frequency bus). car parking requirements will be minimised. substantially reduced or wholly eliminated in certain circumstances. - In suburban locations that are well served by public transport and where the density of the scheme is more than 45 units per hectare. a reduction in parking must be considered. - In peripheral and less accessible urban locations. there should be one parking space per unit with some visitor parking. Lisney Residential Property - Irish City Regions 28 29 - There are speci?c guidelines for the build-to-rent (BTR) sector. i.e. purpose-built residential accommodation and associated amenities built speci?cally for long-term rental that is managed and serviced in an institutional manner by an institutional landlord. When seeking planning permission. these schemes must be clearly identi?ed at BTR and must remain in such use for at least 15 years. Applications must also clearly contain details as to how communal and recreational amenities will be provided. These are categorised as: - Resident support facilities laundry facilities. concierge and management facilities. maintenance repair services. waste management facilities. etc. Resident services and amenities facilities for communal recreational and other activities by residents including sports facilities. shared TV/lounge areas. work study spaces. function rooms for use as private dining and kitchen facilities. etc. There are no restrictions on dwelling mix with BTR. but flexibility will apply in relation to the provision of storage and private amenity space associated with individual units. Additionally. car parking will be at a minimum and the requirement for a maximum of 12 units per core will not apply. - There are also specific guidelines in relation to shared accommodation shared living co-living but this sector is viewed as a sub-component of BTR. The guidelines propose one format where one residential unit can comprise between two and six en-suite bedrooms of single and/or double occupancy with a common shared area within the residential unit for living and kitchen facilities. Overall there would be a maximum occupancy of eight persons. The minimum size of the bedrooms and living space is: Single Bedroom 12 Double Twin Bedroom 18 i Living Kitchen Facilities (1?3 Bedrooms) 4 8 per person Living Kitchen Facilties (4-6 Bedrooms) 12 per person Such accommodation will only be permitted in areas where there is an identified urban housing need at particular locations and it is not envisaged as an alternative or replacement to more conventional apartment developments. There will be no restrictions on dwelling mix and flexibility will be applied in relation to the provision of all storage and amenity space. There will be a policy of minimal car parking but there will be a requirement to have a strong central management regime. These new guidelines are signi?cant changes. particularly in terms of car parking requirements and are addressing the changing occupational needs of urban dwellers. The changes will assist in making apartment schemes viable to construct. A recent report by the Society of Chartered Surveyors (SCSI) showed that for a medium-rise (5 8 storeys) block of apartments in Dublin city centre. the cost of building a 2-bed unit was approximately ?470.000 and this fell short of the likely sales price by ?133.000. hence showing that schemes are often unviable. Much of the cost is tied into providing basement car parking and by reducing this. the viability improves. 1.5.8 Built-To-Rent As set out in section 1.5.7 above. the new apartment guidelines incorporate statutory guidelines on the build-to-rent sector. This sector is critical for providing more rental accommodation in the market and through professional landlords. The government has said that it expects up to 5.000 build-to- rent apartments will be built in the coming years. Dublin. and indeed other cities. have not seen much build-to-rent construction and it may be that developers were waiting for the new regulations that will reduce the construction costs. and as with apartments generally will improve viability. It should be noted that any new schemes granted planning permission as 'build-to-rent' must remain in such use for a minimum period of 15 years and schemes cannot be broken up with individual units sold off within that timeframe. Lisney Residential Property - Irish City Regions 1.5.9 Vacant Site Levy This was introduced a number of years ago in a bid to discourage land hoarding. Collection of the levy will commence in 2019 at a rate of 3% in that year and then for subsequent years. it will be charged at 7% per annum. it may have an impact on land values. which is positive for development viability and allowing for the quicker regeneration of lands. however. the legislation is not very prescriptive and there are ways in which landowners may become exempt from the tax. This is likely to be amended in the coming months with a new refined definition due of what constituteS a vacant site. There will also be amendments in relation to ensuring that planning permissions are activated sooner. and development is not delayed. It should also be noted that independent TD's are due to put forward a Bill. which would seek to increase the vacant site levy rate to 25%. The government has confirmed that it will not oppose the Bill but has highlighted possible constitutional issues. Also regarding the vacant site levy. it is disappointing that reports have suggested that just 6% of Dublin lands (that are zoned and serviced) owned by the four local authorities has been included on the register. 1.6 International Comparisons 1.6.1 Competing Cities For an international comparison. set out below are average prices in various European cities. It should be noted that there is no one single source of comparable information regarding average prices. While most European countries have of?cial property price indices. with the exception of Ireland and the UK these only show trends in prices and do not provide average prices. As such, we have relied on various sources. much of which is subjective analysis. to provide an estimate of average prices in each city. Also set out in the table is each city's population and the unemployment rates at the end of January 2018. The average wage shown comprises the net annual earnings at a country level. City Population $7.39; {$237.53 Average Price . have? so Amsterdam 810.938 3.9% ?45.038 ?395,000 ?1,750 Barcelona 1.749.281 15.8% ?32,958 ?450,000 i ?1.300 Eltast - 136,500 4.1% ?37.430 ?1,050 Berlin i 1.773.631 3.4% ?40,728 ?241.000 I ?1.150 Cork 119,230 . 5.3% 7 ?40,786 32%09 ?1,300 ?Dublin I 554.554 5.3% ?40,786 ?390,000 I ?1.850 Frankfurt 717.624 3.4% ?40,728 ?232,000 I ?1,350 Elway i 258. 552 5.3% ?40,786 _l ?182.1oo i_ ?1,100 Geneva I 191. 557 3.2% ?53,308 i ?8?00 ?,500 Glasgow I 598. 830 4.1% ?37.430 ?145,000 ?1.050 Limerick 195,175 5.3% 7_ 7 ?40.786 ?162.1oo I ?950 Liverpool 465. 700 4.1% ?37.430 ?148. 000 ?900 Bndli _i _8.787._892 4.1% ?37,430 4 (@1000 3350 Luxembourg City 1 103. 641 ?7 5.2% 1 ?53,713 ?905,000 1 ?1,900 7 Manchester 541, 300 4.1% ?37, 430 ?194. 000 ?1,250 Milan 1.360.422 10.7% ?31 37?5 1 ?272. 000 i ?1400 Munich i 1.430.000 3.4% 7'7 ?40,728 ?404,000 i ?1,750 7 Paris 1 2.240.681 9.2% ?37.450 ?675,000 ?2,350 Prague i 1.259.000 2.3% ?21,716 ?202,000 ?900 Vienna I 1.767.000 4.6% ?43.093 I ?410,000 I ?1,200 Waterford 53.500 5.3% I ?850 Zurich 384.786 3.2% ?53,308 I ?838,000 I ?2,250 Source: lilrostat (Population. Unemployment Rate). OECD (Average Wage), various individual country property sales 8 rental portals. Lisney Residential Property - Irish City Regions 30 Aver?! Prlce ?1,000,000 - ?900,000 - (800.000 7001130 (2600.000 500. ?mun? ?3 {?60 06 $1 ?0 V?s; $29.6: 1&3} 9% ?bxl?ooq??o?m 6? 6?90 v9 9' 1.6.2 Eurostat House Price Index The Eurostat House Price Index provides trends in house prices at EU and individual member level of newly built and existing residential properties. The latest quarterly ?gures for 01 2018 show that on an annual basis, average house prices increased by 4.5% and 4.7% in the Euro Area and the EU respectively. Individual country annual changes in house prices are included in the table below (where available). Annual Change in House Prices (01 2018) European Union 4.7% Euro area 4.5% Belgium 2.5% Bulgaria 7.1% Czech Republic 7.7% Denmark 5.8% Germany I 5.3% Estonia 6.6% Ireland 12.3% Spain 6.2% France 3.4% Croatia 8.5% Italy Cyprus 3.7% Latvia 3.7% Lithuania 7.8% Luxembourg 6.2% Hungary 11.5% Malta 5.2% Netherlands 9.3% Austria 5.3% Poland 6.0% Portugal 12.2% Romania 6.6% Slovenia 13.4% Slovakia 11.7% Finland Sweden United Kingdom 4.4% Iceland 13.7% Norway Source: Eumstat LIsney Residential Property Irish City Regions 1.6.3 OECD Price to Income Ratlo Mute inwmv lath ha I ?0 Im lill -1IJ JU II 5 (.3 1" It?? kb?li? #00933 9 09?6?: '6 MM J2, (5:30} q? 0+ ?bfr Source: OECD The OECD produces a ratio of nominal house price divided by nominal disposable income per head. This is a measure of house price affordability and is used to assess under-valuations and over- valuations of property prices in various markets. The results for 2017 are set out above. 1.6.4 OECD Price to Rent Ratio The OECD produces a ratio of nominal house prices to rent prices. This measures the affordability of owning a house. The results for 2017 are set out below. 0 5L :zb . {g 07?? 5 s? 5" 92" a?gjs" #0 \3 gig 5., ??&955 $0046 91x ?6 ?6 Pritt (at! 34? '26? Source: OECD Llsney Residential Property - Irish City Regions 32 33 1.7 Summary The Irish residential market has seen a significant change in underlying fundamentals in the past six years. Purchaser demand has increased considerably. which has led to price increases. Much of this growth offset the over-correction that occurred between 2007 and 2012 and was from a very low base. The average new housing supply need nationally each year is between 25,000 and 30,000 units. In Dublin. this will be split 50/50 between houses and apartments. while in the other city regions, the split is more likely to be 75/25 houses to apartments. Second hand supply nationally in June 2018 was 26.000. There were approximately 500 new homes schemes on the market. The national vacancy rate was 9.2% according to Census 2016. However. not all properties vacant are aVailable for sale. The median sales price for all buyer types and all property types was ?338,750 in Dublin: ?197,000 in Cork; ?177,500 in Galway; ?152,500 in Limerick: and ?130,900 in Waterford. The average ?rst-time-buyer working couple uses 21.2% of their net income to fund a mortgage in Ireland. This was 32% in 2007. In a bid to slow down the pace of rising residential rents. rent pressure zones were introduced by the government. This limits annual rental growth to Average rents in each city region vary as follows Dublin at ?1,436; Cork at ?948; Galway at ?956; Limerick at ?812: and Waterford at ?674. Data from the 050 shows that in the 12 months to the end of 01 2018, national residential completions increased by 42%. Commencement notices increased by 14% over the same period (but was 225% higher compared to the year to end-01 2013). In the year to March 2018. 24,531 residential units (17,603 houses and 6,928 apartments) were granted planning permission nationally. an increase of 37% annually. The number of units under construction is growing. In Dublin at the end of 01 2018, there were 7,353 units under construction. Across Dublin. Cork. Galway. Limerick and Waterford there are 15,151 residential units with planning permission but no construction has yet started. There are 7,098 residential units in the planning system seeking permission in the counties of Dublin, Cork, Galway, Limerick and Waterford. The Irish Government and regulatory bodies have introduced a number of policies in recent times relating to the housing market. These primarily comprise rules to reduce the pace of growth and others to increase new home supply. Some improvements are starting to be seen as a result. The Eurostat House Price Index grew by 4.5% in the Euro Area in the 12 months to the end of 01 2018 and by 4.7% in the EU. Lisney Residential Property - Irish City Regions Lisney Residential Property - Irish City Regions 34 02 35 Dublin 2.1 Sales Market 2.1.1 Overview The Dublin residential market remains very active. In 2015 and 2016 approximately 25% and 2.9% respectively of the housing stock in Dublin was transacted (between 13.000 and 14.000 units annually). Improvements were seen in 2017 with just under 16.000 units transacted or approximately 3% of stock. For a market that has supply constraints. this is noteworthy as intemational evidence suggests that an optimal ?gure is between 3% and Significant price increases were witnessed in 2014 and into 2015 However the introduction of the mortgage lending rubs in 2015 did have the desired effect of taking some steam out of the market in certain sections and price in?ation slowed. Price increases are evident. particularly for properties up to a value of ?500,000. This part of the market is dominated by ?rst-time-buyers and those wishing to trade down. The help-to-buy scheme is also impacting here by assisting ?rst-time-buyers through a tax rebate of 5% if a newly constructed home is purchased. Apartments generally fall into this lower value category and those that are well located close to amenities and good transport links are well sought after and seen as a more affordable option by many who want to remain close to the city centre. The middle market (between and ?1m) mainly comprises those trading up. It is also active but is more restricted by supply constraints. the mortgage lending rules and sales 'chains'. At the upper end of the market and for properties in excess of ?lm. it is property and buyer speci?c. Homes that are in tumkey condition can achieve a premium. while those requiring significant works can take longer to sell In recent months. we have witnessed a general stabilisation in prices. Much of this is due to the gap between vendors and potential purchasers. In many situations. particularly in the mid-market. asking prices are ahead of purchaser affordability and as such. purchasers are standing back. It is likely that there needs to be an adjustment in vendors' expecta?ons to reach realistic asking prices. 2.1.2 Availability At the end of June 2018 there were 5.112 second hand properties for sale in Dublin. In terms of postal district. Dublin 15 accounted for the largest number of available properties with 404. while north and south county Dublin had 708 and 576 prope?bs available. respectively. In terms of property type. three- bed houses were the most readily available at L793. followed by four-bed houses at 1.192. and two-bed apartments at 931. Supply of Previously Occupied Residential Units (June 2018) Dublin 3,706 1.406 5.112 Source: MyHome.ie. Lisney analysis In terms of new home supply. it is not possible to track the number of units available for sale. However. there were 160 new homes schemes on the market at the end of June 2018. The vacancy rate (excluding holiday homes) across County Dublin in April 2016 (the most current of?cial data). was Lisney Residential Property - Irish City Regions 2.1.3 Sales Prices Median prices for Dublin in the year to the end of April 2018. by buyer type (first-time-buyer. mover and investor). are given below at a county and Eircode level. The location with the highest median price range was Dublin 6. Dublin 10 generally has the lowest median achieved prices but also has a relatively low housing stock. Median Prices (Year to April 2018) Overall Dublin Median Price ?338,750 ?322,500 ?375,900 ?262,700 Source: CSO Median Prices - All Dwellings (Year to April 2018) Dublin A94: Blackrock ?592,500 A96: Glenageary ?573,700 Dublin 1 ?264,250 002' Dublin 2 ?386,500 D03: Dublin 3 ?373,125 DO4: Dublin 4 ?535,500 DOS: Dublin 5 ?377,000 DOS: Dublin 6 ?615,000 007: Dublin 7 ?324,750 008: Dublin 8 ?304,250 D09: Dublin 9 ?405,200 010: Dublin 10 ?216,000 Dublin 11 ?238,125 D12- Dublin 12 ?311,000 013: Dublin 13 ?345,750 014: Dublin 14 ?569,425 015: Dublin 15 ?314,100 016: Dublin 16 ?475,000 D17: Dublin 17 ?221,125 018: Dublin 18 ?467,500 D20: Dublin 20 ?327,250 D22- Dublin 22 ?258,250 D24: Dublin 24 ?292,850 D6W: Dublin 6W ?521,500 K32: Balbn'ggan ?222,500 K34: Skerries ?342,500 K36: Malahide ?442,300 K45: Lusk ?261,250 K56: Rush ?267,000 K67: Swords ?306,375 K78: Lucan ?302,000 Source: 050 Lisney Residential Property - Irish City Regions Dublin Median Prices 02 2018 ?267.00) 0267.000 6327.250 - 0 327.250 - 6406.000 - 6405.000- 6475.000 - 8475.000 - 8615.000 To provide a context of price trends over the last number of years. the chart below illustrates the median price achieved in Dublin from 01 2010 to 01 2018 for first-time-buyers. movers and investors. Achieved Median Price in Dublin (01 2010 01 2018) Medlan Price ?450,000 8400.0!? ?350,000 8300.0?) ?250,000 . ?200,000 ?150,000 ?100,000 ?50,000 ?All Buyers ?Nbver Investor Source: CSO, Lisney 37 Lisney Residential Property - Irish City Regions 2.2 Rental Market 2.2.1 Rental Prices The RTB index shows that average Dublin rents increased by 6.6% on an annual basis to 01 2018. For all property types. the average rent in Co Dublin at me end of 01 2018 was ?1,436. The table below sets out one. two and three-bed average achieved rents in County Dublin and at local area level for detached. semi-detached and terraced houses. and apartments. In terms of property type. three-bed apartments achieved the highest rents in 01 2018. The postal district that achieved the highest average rent during the quarter was Dublin 2 for one. two and three-bed properties. The lowest achieved rent during the quarter was in Dublin 10, across one. two and three-bed properties. Average Achieved Rents (01 2018) One-Bed - ?881 ?1,113 ?1,232 Two-Bed - ?1,372 ?1,371 ?1,279 . ?1,463 Three-Bed - ?1,610 ?1,417 ?1,441 . ?1,731 Source: RTB Average Achieved Rents (01 2018) County Posmode One-Bed Two-Bed Three-Bed Dublin Dublin Overall ?1,165 ?1,426 ?1,483 Dublin 1 ?1,100 ?1,562 ?1,722 Dublin 2 ?1,331 ?1,885 ?2,186 Dublin 3 ?1,061 ?1,450 ?1,577 Dublin 4 ?1,334 ?1,819 ?2,171 Dublin 5 ?1,046 ?1,412 ?1,420 Dublin 6 ?1,043 ?1,566 ?1,940 Dublin 6w ?1067 ?1532 ?1,694 Dublin 7 ?943 ?1,361 ?1,460 Dublin 8 . ?1,134 ?1,410 ?1,584 Dublin 9 ?1,006 ?1,367 ?1,523 Dublin 10 ?991 ?1,190 ?1,166 Dublin 11 ?1055 ?1256 ?1310 Dublin 12 ?954 ?1,322 ?1,340 Dublin 13 ?1,128 ?1,456 ?1,497 Dublin 14 ?1,290 ?1,601 ?1,895 Dublin 15 ?1,137 ?1,337 ?1,344 Dublin 16 ?1207 ?1574 ?1637 Dublin 17 ?1,053 ?1,271 ?1,369 Dublin 18 ?1,371 ?1,638 ?1786 Dublin 20 ?1,079 ?1,304 ?1,386 Dublin 22 ?1,085 ?1,267 ?1,245 Dublin 24 ?1,094 ?1,297 ?1,283 Blackrock ?1,295 ?1,633 ?2,013 Dun Laoghaire ?1,134 ?1581 1 ?1,731 Lisney Residential Property - Irish City Regions 38 DumeonlsO220iO-18w j