Galway property prices in the first quarter of 2019, have seen very little in terms of growth.
This is despite more than 6 percent growth year on year. According to an average house price survey by the Real Estate Alliance, all major cities outside of Dublin including Cork, Galway, Limerick and Waterford saw little to no price movement in the opening quarter of 2019.
Why is this?
This was forecast by the Real Estate Alliance in late 2018 as the property market has been facing many challenges, including the possibility of a no-deal Brexit and parts of the country reaching Central Bank enforced mortgage lending ceilings.
This trend of slow growth is likely to continue as it has been announced this year that the government plans to continue enforcing rent pressure zones for that were introduced in late 2016 until 2021. And while the possibility of a no-deal Brexit is far less likely, they have also been granted an extension to October 2019.
Rent Pressure Zones
This extension to the rent pressure zone laws is also accompanied by a revision to the qualification criteria for the zones as the laws surrounding RPZs have been heavily criticised since their implementation. RPZs did little to protect new entrants to the rental market as new lets were able to circumvent the 4 percent cap. Despite the introduction of these laws in 2016 the national average monthly rent rose to €1334 in 2018.
Meanwhile, Galway’s office rental prices are set to surge. Galway’s supply of prime office rentals is not meeting the demand. Office development has likely been put on pause until Galway’s infrastructure and development plans have been finalised. This includes a request to finance a major improvement to the flow of traffic around the city.
Future Development Plans
While many possible projects in the Ballybrit suburb, are waiting for the finalisation of these plans, there has been progress made in attempts to alleviate the office demand in Galway city centre. An Bord Pleanála has given the go-ahead for the development of a grade A office space overlooking the Galway Docks.
Why the increase in demand in office space?
The increase in demand is coming from both new entrants and the expansion needs of existing occupants, that consist primarily of the rapidly growing information technology sector. This has encouraged the refurbishment of second-generation accommodation around Galway city centre and even as far out as Oranmore.