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Friday 15 December 2017

Forget Ballsbridge - Dublin's housing market strongest in North Inner City

Forget about Ballsbridge and Ranelagh. Dublin's housing market recovery is strongest in the North Inner City and Finglas as a new generation of buyers seek convenient, affordable homes.

Who would have thought it possible?

The latest Daft.ie figures show that leafy Dublin 4 and 6 are taking second place to the North Wall and Finglas in Dublin's house price recovery with the strongest demand from buyers being for properties north of the Liffey.

What's going on?

As the Dublin housing market grew progressively more insane during the early and mid-noughties buyers had to move further and further from the capital in order to purchase affordable housing.

We have all heard stories of people commuting to the capital from Cavan, Wexford and even further afield.

Unfortunately, those who moved out of the capital failed to fully factor in the cost, both in time and money, of such long distance commutes. If they had they would have quickly realised that their "cheap" house wasn't quite so cheap after all.

Today's house buyers seem determined to avoid the mistakes of their predecessors.

They don't want to spend hours commuting to and from their dream, or should that be nightmare, home in Outer Ballygobackwards.

One of the most important but least understood factors in any market crash and subsequent recovery is time.

It is now seven-and-a-half years since Dublin house prices peaked in February 2007. Since then, a new generation of home-buyers has come of age.

Today's buyers are largely in their late 20s and 30s. This means that they avoided the over-indebtedness and negative equity which has financially crippled most of those who bought houses at or close to the peak.

Unlike their predecessors of a decade ago, most of them have also saved enough money to be able to afford a large deposit.

A market with plenty of buyers who don't have any borrowings but have saved enough for a hefty deposit, what could possibly go wrong? Unfortunately, while there may be no shortage of suitable buyers, there is a massive shortage of suitable homes coming on to the Dublin housing market.

Very few new houses or apartments have been built in Dublin since the bubble burst in 2007. Last year, only a little over 1,300 were built compared to an estimated annual demand for 8,000 new housing units in the capital.

If Dublin house prices aren't to soar to unaffordable heights once again it is vital that this supply shortage is addressed as quickly as possible.

But what about the "shortage of building land" excuse regularly trotted out by estate agents and others with a vested interest in high house prices?

According to this line of argument, with the exception of Fingal to the north of the city, there is very little greenfield building land left in the Greater Dublin Area.

While this may well be so, what about "brownfield" sites?

Dublin city centre and the inner suburbs have plenty of land currently occupied by obsolete or redundant industrial buildings, warehouses and religious institutions.

Does Irish Rail really need over 70 acres of railway yard at Inchicore?

Shouldn't the Port of Dublin be moved up the coast and its existing facility freed up for housing? What was the logic of letting Guinness built its new brewery at St James's Gate rather than at Celbridge, as its parent company Diageo had originally intended?

One legacy of the property crash is that NAMA and other State bodies now control most of the major brownfield sites in and around Dublin city centre.

This represents a once-in-a-lifetime opportunity to sort out Dublin's dysfunctional housing market.

Not since the Wide Streets Commission of the 1700s has a public body had such an opportunity to reshape the capital for the benefit of all it citizens rather than a handful of developers.

If we fail to grasp this opportunity then Dubliners will be paying the price for many generations to come.

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