May 27, 2019

Where to invest in Irish property? The least favourite locations…

Irish property

There is place across Ireland that make Irish property appear way to expensive and unaffordable, tarnishing the real estate market reputation.

Ranelagh is the most expensive place to buy a house in Ireland and it is also the worst for investment yields.

From a property investor perspective, it is essential to stay on top and have an interest in a number of things, like capital appreciation, low maintenance costs, a good flow of tenants and the rental yield the property generates.

But what is rental yield? It is a simple metric used by investors to calculate the potential return on a property. This is done by working out how much cash an asset generates annually as a percentage of the value. Yields can vary across the country, which is a foreseen outcome, just like rents and property prices vary accordingly.

Where is advised not to invest in Irish property?

The Central Statistics Office figures highlighted that where the rental yields were the poorest, the locations were the same for the worst place to invest in. The average sale price in April was €706,741 – Ranelagh, Rathmines and Rathgar – and in these areas also had the country’s lowest rental yield too (of just 3.6%). This was followed by Dublin (Ballsbridge and Donnybrook) at 3.9%.

The areas around Dublin do vary in relation to rental prices, though. In one part of Dublin, rent was €2,092 whereas in another area it was €1,507. The average sale price in Ranelagh is more than three times the price of the average property in Ballyfermot. Co Cork has the lowest percentage of yield outside of Dublin at just 4.3%, followed by Co Limerick at 4.5%, Wicklow at 4.5% and Co Galway at 4.8%.

However, Ireland, in general, is performing a lot better in the housing market compared to the rest of Europe, with the lowest Irish yield on a par with UK averages.

So where are the best places to invest? In Dublin, the best places to invest are those where the growth in rent has outgrown the growth in property prices. Some areas across Dublin, as previously mentioned, are producing higher rental yields in the country compared to other locations. Average sale prices are fluctuating too, depending on the size and location of the property. Irish property is certainly under demand, which is why understanding where the best and worst locations to invest in is super important for making wise property decisions.

Outside of Dublin, increased prices are starting to squeeze yields, despite there being an attractive amount of numbers on offer. So depending on the location, the situation for the real estate market in Ireland definitely varies.

Be sure to check out the current state but definitely consider the option and buy a house in Ireland where the landscapes are exceptionally beautiful!

Written by Gemma Smith

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