An Economic and Spatial Plan for Limerick Appendices

Limerick 2030 An Economic and Spatial Plan for Limerick
market. The average price for housing outside Dublin is in the region of €149,000 to €162,000, and
does not show significant signs of strengthening at present.
Prices are not expected to recover to 2007 levels in the short to medium term. While the Dublin
market has started to recover, the same cannot be said for the rest of the country. Excess supply,
unsuitable stock in the wrong locations and restrictions on lending mean that sales remain low. A
decrease in the levels of immigration coupled with the introduction of a new property tax will keep
sales low in the short term.
The ESRI data also show an unusually high proportion of households who are renting today, probably
as it is more profitable to rent than to buy in a market that was seen as over-valued and is still in a
falling market. 24 There has not been a drop in rents over the period since 2007 that corresponds to
the decrease in sale prices, with rents dropping by only 29.4% nationally. Yields have, however,
increased from a low of 3.5% in 2007, to 5.5% in 2012 (in all markets). 25 The rental market continues to
perform well in light of the current conditions for purchasers.
Retail
There are two aspects to the Retail Market, occupiers and purchasers/investors. Decreasing sales
volumes and rising unemployment has impacted on demand for retail space. Prime yields are still at
a 10-year high, at 6.45% in the prime Dublin market (compared to 7.85% in Limerick), from the 10-year
low of 2.85% (4.0% in Limerick). 26 Prime rents are down across the board, €5,400 on Grafton St. in
Dublin, down 3.6%. Limerick has performed most poorly of all the major cities in this regard.
There has been increased interest from international retailers in the Irish market, who have been
attracted by favourable rents and improved lease agreements (including substantial rent free
periods and short break clause horizons). While rental levels are down, they are still strong when
backed by an international retailer.
Investors are wary, however, of many of the factors that are enticing the international retailers. The
expected abolition of the upward only rent reviews and the favourable terms that can be
negotiated by tenants has meant that only the prime retail locations are being seriously considered.
Uptake outside of these areas, therefore, is still poor. Developers are slow to react to latent demand
due to problems with obtaining credit. Lending institutions are only lending where there is a
significant deposit (anecdotally in excess of 40%) and a secured long-lease tenant.
24 ESRI Quarterly Economic Commentary, Summer 2012
25 Taking Stock of Ireland's Property Market, Five Years into the Crash", Ronan Lyons, Commentary on Daft.ie Report July 2012
26 Chushmann & Wakefield, “Marketbeat: Ireland Retail Snapshot” Q1 2011
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