Estate agent predicts 'largely stable' house prices this year amid 'volatile' rent increases

Estate agent predicts 'largely stable' house prices this year amid 'volatile' rent increases

The country's largest real estate agent has issued a downbeat assessment of the housing market in 2020, warning that it has deteriorated in the last year and that the issues are unlikely to abate soon.

Marian Finnegan, managing director of Sherry FitzGerald, said "restrictive lending policies" has caused a collapse in price growth in many parts of the country.

She warned that limited access to credit has caused a "stagnant" environment in the second-hand sales market and that the dysfunctionality in the rental market is continuing to worsen.

She said 2020 will see "a stable rather than expanding transaction base" due to the decision by the Central Bank not to alter the lending rules.

"The continuation of the help-to-buy scheme should underwrite new homes development, particularly in regional Ireland," Ms Finnegan said.

"However, the pace of increase in construction activity will inevitably disappoint without further interventions.

Price inflation will remain largely stable. However, rental inflation will remain elevated and volatile unless we see a notable improvement in the supply of rental properties.

The average value of homes grew by 0.2% in 2019. This compares to growth of 3.7% in 2018.

There was modest price growth outside Dublin at 1.5%, though this figure had been 4.5% in 2018.

In the regional centres outside of Dublin, Limerick recorded the highest increase at 4.1%, while prices in Cork and Galway increased by 0.8% and 0.7% respectively.

Ms Finnegan said the figures show a "largely flat pricing environment" in 2019.

According to the Property Price Register, there were approximately 38,700 sales in the first nine months of 2019, the most recent figures available.

It was a 4% increase in comparison to the same period in 2018. Notably, though, the volume of new dwellings sold fell by 4% nationally and 20% in Dublin.

Ms Finnegan said it appears that we are "no closer to resolving the national crisis that is the housing market".

"If anything, the crisis has deteriorated in the passing year," she said. "Despite the strength of demand, overall transaction activity in the residential market remained flat during 2019."

Issues in the rental market continue to worsen, with price growth at a three-year high and a large number of landlords exiting the market. One-third of all vendors selling with Sherry FitzGerald were selling their investment properties.

"Rents continue to rise rapidly and with the continued exodus of private landlords from the market, there is little hope that this will abate soon," Ms Finnegan said.

"Despite the considerable debate and discussion, we are still no closer to resolving the overall accommodation crisis."

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