House Prices Back at 2014 Price Levels?


Celtic Tiger investments were primarily focused on capital growth / appreciation rather than rental income and yields. People did not sell their investment properties just because the rental yields were low – investors piled in despite the fact rental yields were low and in full knowledge of the yield situation. They assumed capital values would rise indefinitely, or for a very long time, which ultimately did not work out for them. Yields weren’t generally as low as 1% (although low single digit yields were common) and there were also other incentives to buying such as Section 23 / 50 tax relief that skewed investment decisions and pushed people towards bad decision making.


In terms of the EU raising interest rates in the near term, I don’t know it’s not an area I have researched well but when researching inflation / deflation scenarios - I came across this article from Trevor Jackson (economic historian at George Washington University) - I thought it was interesting


Buyersagent got in before me, but yes of course the bubble and the crash were not monocausal. You make it sound like before the crash the market was flooded with savvy investors looking at the relative performance of rental returns vs. deposit rates. Bubbles by definition don’t work like that. We had a full-on property mania, with people expecting to become millionaires through asset price inflation and oblivious to low yields. Pro-cyclical government policies fueled the speculative frenzy. The credit crunch did end the bubble, but if it hadn’t something else would have, perhaps at even higher price levels than was the case.


In the case of Ireland, all the liquidity in the world can and will be thrown at it. But as with 2008 it’s not really a liquidity problem, but a solvency problem.

Rational providers of Capital will ration the money available to the housing market via the Banks because they have no proper recourse. Or demand super normal returns (i.e. high margins/interest rates) to take on the high default risk given Ireland’s track record over the last 15 years.

This stuff is Economics 201, but maybe P Lane & Co have an enhanced understanding of this that we cannot appreciate from this vantage point. Or maybe not.


Maybe. But this report from 2007 shows that certain commentators were convincing people to invest in property in the later years of the property bubble due to rental growth by stating that “The average rent nationwide now stands at just under €1,400 - almost €300 more than for the equivalent figure in May 2004. This is a major jump and equates to an increase for the period of 27%. The Report shows rents have increased in Dublin by on average 12% during the past year, with the increase in Limerick and Cork even higher at 14%.”

The link the Daft article is here:


the famous ‘maybe’ response to everything…

by your logic yields were 1% ‘‘in many parts of Dublin’’ so if a report was advertising a 27% increase between 2004 and 2007 then the same investors buying in at 1% in 2004 would have then been yielding 1.27% in 2007. that would not turn the dials on attractiveness to investors… the report may have mentioned it and it is not irrelevant but rents were not driving the celtic tiger. people were willing to tolerate a situation where they are ‘losing’ money every year where the rents are less than the holdings costs (interest, maintenance, fees etc.) because they were hoping for double digit percentage increases in property values. if your net yield is minus 1% or 2% but your property is going up 10% year on year you will tolerate the rental loss.


Good point. Investors may keep lending to our Government given the implicit backing of the ECB. Lending to Irish banks are a completely different kettle of fish.

As you say, our history of non-enforcement of mortgage arrears may mean that the hoped for fall in the differential between other EU countries and Ireland’s mortgage rates is not very likely to happen. Well, not in the next few years anyway.


Thanks for the link. Very interesting article. It seems that universal basic income or some variation of it appears to be all that’s really left in the central banks arsenal.


1 Mountpleasant Villas, Ranelagh, Ranelagh, Dublin 6, D06 F802
2 bed, 2 bath, 70 sqm, end of terrace
On the market since 11/08/2020, asking €525,000 - current offer €500,000.

First sold in 2010 for €246,000 (price would have dropped more by 2012/3) and then extensively refurbished. Sold in current condition in Feb 2017 for €437,000 so the current highest offer of €500,000 represents a 14% uplift on the 2017 value. No deadline set for best offers yet so it may end up higher.

No 2014 prices in Ranelagh anyway.


Based on previous posts, it seems like we are seeing sales price drops in the upper end (€700k+) of the market, but stable sales prices below that - is that what people are experiencing?
I am talking about actual sales prices - not asking prices!


I think the price falls in the €500k and below category may start to happen sooner rather than later. It would seem that Cairn Homes and Glenveagh may be in the opening gambit of a potential price war at the lower end.

As per the interview with RTE this morning, the CEO of Cairn Homes said that going forward, they will concentrate on selling homes in the €300k - €380k price range.

He then went on to say that most other developers can only build for that price given that most other developers have higher site costs, finance costs etc. (see link to SCSI cost of building report below).

He followed that up by stating that Cairn Homes purchased their sites at an average of €32k each. He also stated that he can sell his homes for a similar price to what the state can build them at. Seems to be their strategy going forward. Glenveagh have a similar strategy, so will be interesting to watch.

For anyone interested, the RTE interview with Cairn Homes is on Morning Ireland. It’s included in the 7:50 am Business News slot on their website.

Link to Morning Ireland:

For anyone interested in the SCSI report “The Real Cost of New Housing Delivery” published in July 2020, they put the cost of building a 114 sq.m. home at €371,311, split between €178,902 hard costs and €192,409 soft costs.

Link to SCSI report here:


Its a very different dynamic to what played out 10 years ago. As noted previously across this site, the involvement of institutional investors with large portfolios across different segments of the market means that any correction is unlikely to be as drawn out as it was a decade ago. Then it was leveraged individual speculators who had fuelled the bubble.

Cairn and Glenveigh have simply identified the threat posed to them both by the likelihood of the widescale move to Working From Home (ie flight from Dublin) along with the incoming recesion and are seeking to limit exposure asap. The impact of such moves are likely to be felt quite soon


I responded to the original SCSI report here - Cost of Building 3 Bed Semi-D

In summary land costs and the margin and the VAT on top of that is a huge chunk of the price that you pay. Taking the quoted land+margin+VAT (108k) and replacing it with half the cost and an overall 10% margin you get a price of 219k. When builders quote costs they always quote the current cost of land - not what they actually paid for it. These lads have been hoarding cheap land for years. Prices have only risen because the banks and the government have fuelled the price rises with cheap credit and subsidies.


Where are they targeting to build these €300k houses, though? Kildare, Meath, Wicklow, Cork?

The housebuilders are targeting FTB who won’t require any deposit (or a very small one to cover legal & stamp duty), which makes perfect sense but for the many of us who would not entertain moving to another county or the very outer reaches of County Dublin it has limited impact.


According to their 2020 interim report, the average selling price for their starter homes in 2020 in Lucan and Dublin 24 was €372,000.

They already have a 17,000 unit landbank and 78% of their sites were purchased in 2015 and 2016.

Their sites in Dublin are as follows:

Parkside, Malahide Road
Shackleton Park, Lucan
Albany, Killiney
Gandon Park, Lucan
Cherrywood, South Co. Dublin
Clonburris, Dublin
Holybanks, Swords, Co. Dublin
Marianella, Rathgar, Dublin 6W
Donnybrook Gardens, Dublin 4
Griffith Wood, Griffith Avenue, Dublin 9
Rostrevor Place, Marianella, Rathgar
The Quarter at Citywest, Dublin 24
Montrose, Dublin 4
Cross Avenue, Blackrock, Co. Dublin
Stillorgan, Co. Dublin
Swords, Co. Dublin
Barrington Tower, Carrickmines, Dublin 18
Citywest, Dublin 24
Glenamuck Road, Carrickmines, Dublin 17

Link to the Cairn Homes 2020 interim report here:


Even looking at those areas, though, it’s easy to split them into two distinct groups:

(i) Will never be selling properties @ €300k-380k:
Albany, Killiney
Cherrywood, South Co. Dublin
Marianella, Rathgar, Dublin 6W
Donnybrook Gardens, Dublin 4
Griffith Wood, Griffith Avenue, Dublin 9
Rostrevor Place, Marianella, Rathgar
Montrose, Dublin 4
Cross Avenue, Blackrock, Co. Dublin
Stillorgan, Co. Dublin
Barrington Tower, Carrickmines, Dublin 18
Glenamuck Road, Carrickmines, Dublin 17

(ii) Might build @ €300k but likely 2-bed ground floor own door apartment and €380k for their smallest terraced houses:
Parkside, Malahide Road
Shackleton Park, Lucan
Gandon Park, Lucan
Clonburris, Dublin
Holybanks, Swords, Co. Dublin
The Quarter at Citywest, Dublin 24
Swords, Co. Dublin
Citywest, Dublin 24

So of the above list, from a cursory glance none of the sites where there is any chance of them building properties at €300-€380k are situated within the M50. They cater especially to a FTB market thanks to Help to Buy and make home ownership accessible to FTBs who barely even have a few grand saved towards the purchase.

If you look at their current pricing at Shakleton Park in Lucan, that gives an idea of what they’re charging at these kind of sites in outer Dublin:

From €310,000 - 2 bed own-door apartment, 87 sqm
From €315,000 - 2 bed own-door duplex apartment, 98 sqm
From €340,000 - 3 bed own-door duplex apartment, 115 sqm
From €375,000 - 3 bed end-of-terrace house, 112 sqm
From €380,000 - 3 bed semi-detached house, 112 sqm
From €400,000 - 4 bed terraced house, 148 sqm
From €460,000 - 4 bed detached house, 134 sqm
From €490,000 - 5 bed semi-detached house, 172 sqm

They’re not proposing to magically start selling their €375-€490k outer Dublin starter homes at €300-€380k. If they’re talking about selling at those prices, they’re talking about focusing on the smaller apartment/duplex and 3 bed terraced properties in the Dublin fringe sites or they’re talking about building regionally in Kildare, Meath, etc., where they are charging less e.g. Oak Park in Naas, where they’re charging €317k for 3-bed terraced houses and €332k for 3-bed semi’s.

Their strategy to focus on these lower value properties makes a lot of sense and caters to an obvious market, but they don’t seem to be talking about a widespread reduction in asking prices for starter homes. Given the more generous Help to Buy changes, they might even end up getting to increase prices. Cairn and Glenveagh focusing on building less expensive housing formats will not reduce the wider property market, only price reductions might negatively impact on prices.


Anecdotal evidence suggests 2 things
People with AIP before covid are now buying before AIP runs out and they may not get it again
Incredibly people are saying they will buy now before they lose their job next year and will not be able to get a mortgage
So pent up demand driving the market up.
Supply has also slackened off
If a lot of rentals cannot wash their face with falling rent these may hit the market next year.
When the inevitable job losses hit next year and the EWS and PUP stop ,I would expect a price drop as credit therefore demand lessens
However the Irish property market is seemingly a law onto itself


My newphew put a bid in of 300k on a house in east wall
EA told him bid was 335.
He opted out
4 weeks later he gets a call asking him is he still interested at 300k
He said no
EA are still making phantom bids


They are the worst of the worst.
Never met a decent one.
Always have an agenda.

I’m going to look at a house tomorrow
One down the toad sold for 575
And they have this one up for 695
It’s just madness.

And before people ask yes they are almost identical in size, condition, aspect.


They’re dead right. If the last crash taught us anything, ‘the family home is practically untouchable’ is the cornerstone of the Irish property market.
Buy now, lose your job later…so what, you’ll get a write down and be left where you are.