Rents and house prices will continue to rise despite increases in housing supply - Goodbody

Rents and house prices will continue to rise despite increases in housing supply - Goodbody

Rents and house prices will likely rise for a number of years as the supply of new homes won’t start meeting demand before 2023 at the earliest, according to broker Goodbody.

New figures from the CSO showed a sharp increase of 25.4% in the number of new homes completed last year, but the annual output of 18,070 was still about half of the number needed to start reining in the huge rises in rents and house prices of recent years.

Goodbody forecasts that rents will rise 5% this year and by 4% in 2020, representing increases well above those in consumer prices and average pay.

House prices will increase by 6% and 5.3% this year and next, respectively, predicted the broker, with prices charged for new homes falling increasingly out of reach of the typical first-time buyer.

On supply, “it will definitely not be a short-term success”, said Goodbody economist Alexander Wilson.

By region, most new homes in 2018 were built in Dublin and the mid-east, followed by the south-west, south-east, west, and the midlands, according to the CSO figures.

The figures also show that the number of apartments has increased but their share of total completions remains small.

A total of 785 new apartments were built in the three months to the end of December, bringing the number built in 2018 to 2,372.

The CSO said its figures for the time being exclude housing units built for students.

Nonetheless, “there are some signs of improvement”, said Goodbody, citing the rise in new apartment builds in the quarter, and “a surge in both planning permissions granted and applied over the past four months associated with the ending of the uncertainty around building regulations and heights”.

More on this topic

Housing Minister to investigate scale of 'sex for rent' incidents taking placeHousing Minister to investigate scale of 'sex for rent' incidents taking place

Minister says it would be 'inappropriate' to intervene as PBP call for ban on evictions Minister says it would be 'inappropriate' to intervene as PBP call for ban on evictions

Increase in planning permissions granted for apartmentsIncrease in planning permissions granted for apartments

Housing slowdown fear despite upbeat CSO dataHousing slowdown fear despite upbeat CSO data

More in this Section

Belfast among 84 new Virgin Atlantic destinations when Heathrow gets third runwayBelfast among 84 new Virgin Atlantic destinations when Heathrow gets third runway

Outlook for US factories remains weak amid slowing global economiesOutlook for US factories remains weak amid slowing global economies

Oil drops 5% on upbeat Saudi production outlookOil drops 5% on upbeat Saudi production outlook

Revived Budweiser IPO set to refresh Hong Kong exchangeRevived Budweiser IPO set to refresh Hong Kong exchange


Lifestyle

Angela’s Ashes: The Musical at Cork Opera House brings some belly-laughs to Frank McCourt's tale, writes Marjorie Brennan.Perfect blend of belly laughs and emotion at Angela's Ashes: The Musical

In Currabinny, there is a large house right at the cliff’s edge, overlooking the whole of Cork Harbour.The Currabinny chefs cook with pears

It’s normal for children to occasionally worry but anxiety in a young person can develop into a crippling daily occurrence if it is not properly managed, writes Karen Murray.'Anxiety is a normal part of life': Understanding is key to helping children manage anxiety

This season textiles trend large, full of colour and exotic pattern, and applied in new ways to make a personal design statement from the living room to the bedroom, writes Carol O’CallaghanTextile trends that can help you make a personal design statement

More From The Irish Examiner