Provide a brief outline of the general residential property market in Ireland from the early 1990's, with a focussed view of the property market in Dungarvan, County Waterford.

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  1.       Introduction

The Irish Property Market has seen and experienced considerable change over the past two decades.  This report seeks to provide a brief outline of the general residential property market in Ireland from the early 1990’s,  with a focussed view of the property market in Dungarvan, County Waterford,  obtained through personal familiarisation with the town and the estate agents who operate in it.  Some of the determinants affecting the supply and demand factors of property in the area, are also highlighted.  

2.0        Overview of the Property Market in General

The 1990’s saw a change in economic circumstances in Ireland, and in 1994 the property market showed a distinctive and radically changed upsurge, with  the consolidation and continued growth of this trend in 1995.  This trend was further strengthened and fuelled by strong growth in the Irish economy and stable economic policies, low interest rates, low inflation, and a good performance in the national jobs front. (.  However,  house prices continued to spiral upwards, and 1997 and 1998 saw record prices and an unprecedented demand for housing.  This growth in house prices and house price inflation, is well illustrated in the tables below, and further in Appendix A.  

Source: The Irish Property Review, p.4 & 5

In 1998 the government, in an attempt to address the problem of the escalating house prices, appointed an economist, Peter Bacon,  to investigate the housing market (www.irish-and-european.ie/news).  The resultant report was the first of  three reports (published 1998, 1999 and 2000) which have become known as the ‘Bacon Reports’.  

2.1        Bacon Reports

The objective of these reports was to assist in establishing strategies and

mechanisms which would avoid the ‘boom burst scenario’, as occurred in England in the late 1980’s, and instead to see a stabilisation and eventual reduction in house prices.  Interventionist strategies outlined in the reports (some of which have been adopted) included:

  1. Reducing excessive investor demand through changes in the tax treatment of investment income (eg. introduction of stamp duty on new homes purchased by investors);
  2. Assisting ordinary house purchasers through restructuring of the stamp duty code for residential property (eg. the slashing of stamp duty on the purchase of second-hand homes);
  3. Increasing the supply of serviced land in order to meet the strong demand for housing through increased supply (eg. an additional £15million was allocated to fund extra servicing of land under the Serviced Land Initiative);
  4. Recommendations centred around improving the affordability of housing through higher density development with a mix of housing types and prices, and through various ‘shared ownership’ schemes/options;
  5. The introduction of a penalty percentage stamp duty rate and annual ‘anti-speculation’  2% tax on investment properties;
  6. The creation of Special Development Zones (SDZ’s) with specific time-frames (and penalties associated with incompletion within these) to ensure faster development of larger-scale residential schemes;
  7. The recommendation of an amendment to the Planning and Development Act to make provision for Social and Affordable housing (now known as Part V of the Planning and Development Act).

Despite these strategies many of which had positive effects, and the considerable variation and changes in the house price inflation,  property prices have continued to gradually increase, and new house prices rose, nationally,  “from £45000 in 1992,  to £135000 in 2000”  (Gunne, 2000:2).

2.2         Changes since the year 2000

The year 2001 seemed to mark a slight turning point and the beginning of 2001 saw a “significant moderation in the growth of house prices” (.  The 2001 IAVI survey characterises the first quarter as being affected by the Foot and Mouth scare, with some members of the institute stating that “September 11th was the death knell” ().

Prices started to rise again in 2002, and the year became one in which the Irish Residential market “enjoyed a robust period of expansion … which has been in sharp contrast to the performance of other sectors of the economy where activity levels have not yet recovered from the slowdown in 2001”  (Sherry FitzGerald, 2002:1).

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Equating this in monetary terms therefore, the average house in Ireland cost approximately €227000 in the second quarter of 2002 with an anticipated rise to €231000 by the year end with prices in Dublin being higher,  although accelerating at roughly the same pace – an average Dublin house cost €298000 in June, up 13.6% in 6 months (Irish Property Review, 2000:4).

3.0        Dungarvan, County Waterford

Dungarvan is located in County Waterford (see Locality map at Appendix B), and comprises approximately 560 Hectares of zoned land (including Ballinroad village).  It has a population of approximately ...

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