Shortage of sites driving rapid rise in house prices
Among the key findings of the AIB Residential Property Outlook report, carried out in partnership with Property Industry Ireland and Sherry Fitzgerald New Homes were the availability of suitable sites for development, planning challenges and access to development financing particularly equity financing.
While the report found that financing was a problem facing developers, the survey of first-time buyers revealed that half of those surveyed had more than €350,000 to spend.
It found people who have secured finance are very eager to spend it, with the survey finding that nearly three-quarters of those surveyed want to buy within six months.
Head of business banking with AIB, Ken Burke said that the bank has developed a number of projects to meet the sectors needs.
“AIB launched a €350m New Homes development fund in February 2014 to support the construction and supply of new homes in key urban areas.
“We are already seeing good take-up and we have deployed three specialist new business teams in Dublin, Cork and Galway to support this demand,” he said.
He said the bank’s residential property outlook report highlights some of the key challenges currently impacting the sector.
The key issue that is leading to isolated rising areas of sharply rising prices is a lack of suitable properties to meet the demand of house buyers.
Peter Stafford, director of Property Industry Ireland said the key to solving this is to increase the pipeline of houses for purchase.
“If we can reduce costs and remedy delays in the pre-construction stages of development, especially in planning, a greater number of properties can be brought onto the market.
“This will help keep price inflation down, and ensure that consumers have a choice of high quality housing in the places in which they wish to live,” he said.
CONNECT WITH US TODAY
Be the first to know the latest news and updates
