Significant Government intervention is needed to bring about stability in the housing market, according to Ireland’s largest estate agency.
As Sherry FitzGerald revealed figures showing the cost of an average home in Ireland rose by 2.3% from July to September this year, its chief economist Marian Finnegan warned, 14 months after the Government’s Rebuilding Ireland programme was launched, the residential market remains in crisis.
The latest rise brings growth in the year to date to 6.8%, and compares to a year-to-date increase of 4.0% in the corresponding period in 2016.
The figures echo those released on Monday by the property website Daft.ie, which showed the national average list price is now almost €241,000, 8.9% higher than a year ago and almost 47% up on the low of 2013.
In Dublin, average values rose by 2.5% in the third quarter of 2017, bringing growth in the year to date to 7.3%. This represents a notable increase from the 2.7% recorded during the first nine months of 2016. When Dublin is excluded from the national figure, the quarterly growth figure was 2.0%. The year to date figure came in at 6.2%, compared to 5.6% in the same period in 2016. The regional centres outside Dublin continued to experience robust price growth during the year to date, most notably Galway with a rise of 6.4% in the nine months to September. Cork recorded growth of 5.8%, followed by Limerick, with growth of 5.5%.
According to Ms Finnegan, the “pace of price inflation reflects the impact of the supply-side crisis, which the market continues to endure. As such, price inflation will remain elevated until supply increases significantly”.
The agency noted an increase in mortgage activity which could be partly attributed to the relaxation of the Central Bank rules, which came into effect in January this year. New dwelling transactions recorded in the Property Price Register during the first six months saw a higher growth rate of 24%, compared to the same period in 2016.
However, the stock of properties available for sale remained critically low.
“Fourteen months after Rebuilding Ireland was launched, the residential market is still in crisis,” said Ms Finnegan. “Supply is critically low, price inflation is elevated, and investors continue to flood out of the market.
“The forthcoming budget represents the best opportunity for the Government to address these issues. This housing crisis needs to be treated as a crisis, with significant Government intervention now needed to bring about stability.”
Meanwhile, rent controls are working in reducing increases in rental costs in Dublin, according to Housing Minister Eoghan Murphy. He was addressing a meeting of Dublin City Council to brief councillors on the progress of Rebuilding Ireland.
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