The Society takes its annual look at the commercial and residential property markets.

Residential property sales
Approximately three in four agents observed an increase in activity in 2017, with Munster the only province where the number of surveyors reporting an increase fell (down from 79% to 68%). Some 82% of surveyors in the Rest of Leinster (excluding Dublin) reported an increase in market activity, up from 50% 12 months previously. There is an obvious trend of outward migration from Dublin for more affordable accommodation and this will place a continued strain on key infrastructure servicing the capital and surrounding counties.
This is resulting in higher property prices in commuter counties. agents are predicting another 7-8% increase in prices for both commuter counties and Dublin this year. This is on top of double-digit price growth in 2017.
So will the rate of property price increase slow in the immediate future? It’s difficult to accurately predict, but if we examine supply and demand for a moment, 66% of Chartered Surveyors nationally expect demand to outstrip supply in 2018 and 71% expect the highest demand to be for two- and three-bedroom houses. This creates obvious challenges for policymakers and planners if demand is still high and the requirement for accommodation is for houses. It’s just another reminder of the emphasis placed on new housing schemes and the need for higher density and new apartment design and apartment living. Our challenge is that we have very little accurate data on new units coming to the market. Many sources will report that the number of new builds nationally stands at around 10-20,000 per year. Although it’s promising to see new completions rising each year, it’s not enough to cater for demand any time soon. When we surveyed Chartered Surveyors regarding their expectation of marketing new residential schemes for sale in 2018, only Munster showed positive signs compared with last year’s results. Both Dublin and Connacht/Ulster expect a slight decrease, while the Rest of Leinster remains the same as last year.

Despite the introduction of rent caps, Chartered Surveyors expect rents to increase in all areas.

Residential rental market
The rental sector is in crisis. Despite the introduction of rent caps limiting increases to 4% per year for more than 50% of the private rented sector, Chartered Surveyors expect rents to increase beyond this level in all areas. The 4% cap does not apply to all new tenancies or landlords who carry out a major refurbishment of their property. Nationally, in 2018, Chartered Surveyors predict a significant lack of rental properties, with 81% experiencing an increase in rental demand by tenants in the last 12 months. Half of Chartered Surveyors reported that they experienced a reduction in the number of landlord instructions in 2017. The reasons for this exodus from the market were reported as regulation complexity, emergence from negative equity and being forced to release assets to offset debt. While these properties will most likely service the owner-occupier market, this will no doubt have a negative impact on the increasingly turbulent rental market.

Commercial outlook
Office investment was one of the better performing commercial property types in 2017, particularly in Dublin. Industrial rents rose in Dublin and the Rest of Leinster last year but fell across the rest of the country. Retail rents, however, remained steady in all areas. Rent on office space in Dublin continues to soar above the rest of the country, with the average price per sqm on prime Grade A floor space standing at €638 per annum, compared to the national average of €201. Prime retail floor space in Dublin averages out at €6,000 per sqm per annum, with the national average just €837. Prime industrial floorspace for spaces under 500sqm is €59 per sqm nationally and €98 per sqm in Dublin annually, while for spaces above 500sqm it is €47 per sqm nationally and €85 per sqm in the capital.
The SCSI Annual Commercial Property Review and Outlook report outlines how Chartered Surveyors feel the commercial market will perform over the next year and in the most part, responses are positive. In the office market, surveyors expect rents to rise across the country, with an average 5% increase, with the largest increases of 7% expected in Munster. Industrial rents are also expected to increase nationally by 6%, with higher increases expected in Dublin and Munster. Munster surveyors are also expecting rises of 7% in retail rents for city centre developments. The largest rise however is expected with residential development land, where surveyors predict an 11% rise nationally. This compares to office development land (7%), retail development land (6%) and industrial development land (8%).
The rate of the vacant site levy has divided surveyors across the country. In Munster, most agree that a levy of 7% is the right level. In Dublin, it is felt it should be lowered to 5%. Meanwhile, in the Rest of Leinster, surveyors said the levy should rise to 10% and in Connacht/Ulster, it is thought it should be around 12%.

A total of 70% of Dublin respondents think that Brexit will cause an increase in office demand in the capital. In contrast, in Connacht/Ulster, 36% of surveyors think the UK leaving the EU will decrease demand in this area; this has jumped from just 6% last year. In Munster and the Rest of Leinster, large majorities think it will have no impact.
No surveyors in Connacht/Ulster or Munster think that Brexit will have a positive impact on business activity in 2018. However, most in Munster (53%) think it will have no impact on their business. Some 79% of Connacht/Ulster surveyors think it will have a negative impact on their business. There is a pronounced contrast with the feelings about the UK leaving the EU in Dublin, where 46% of surveyors say it will have no impact and 39% think it will actually be good for business.

You can read the full Commercial Property Review and Outlook 2018 at, and the residential Property review and outlook 2018 at

Edward McAuleyEdward McAuley
Head of Practice and Policy, SCSI