Housing crisis continues with fall in number of houses for sale

The housing market continues to face “a crisis of supply”, according to one of the country’s largest auctioneers, which says that the number of houses available for sale has fallen 14% in the last year.

Research by Sherry Fitzgerald found that approximately 27,800 residential units — 1.5% of the total private stock— were advertised for sale nationwide in July of this year, a reduction of 14% compared to the same month last year.

The drop in stock is worse in Dublin, where the number of units available for sale declined by 18% to 4,600 in the 12 months up to July 2016.

The Galway market saw the strongest fall outside the capital, with a 15% decline in its available stock.

“All in all, the market remains very challenged with moderate levels of construction and transactions, low stock and rapidly rising rents,” said Marian Finnegan, chief economist with Sherry FitzGerald.

The research also found that house prices rose by 4% in the year to date, and rose by 1.2% in the third quarter of 2016. Dublin house prices grew by 1.0% in the third quarter, bringing the year to date growth to 2.7%. This compares to growth of 1.4% in the same period the previous year. Cork saw growth of 5.5% in the nine months to the end of September.

Despite the increases, house prices are still 40.4% below peak levels of 2006.

“The level of price inflation in the year to date was largely consistent with the same period in 2015, but unfortunately this stability once again masks some very significant indicators of a market in crisis,” said Ms Finnegan.

The reports comparison of the Property Price Register data with the mortgage market data by Banking and Payments Federation Ireland suggests cash buyers account for 47% of all transactions in the first half of 2016.

Owner-occupiers represented 71% of transactions, while investors accounted for 20% of all purchasers during the first three quarters of 2016.

Sherry Fitzgerald analysed the profile of vendors who sold their property through the estate agents over the nine-month period, and found 32% of sellers were selling investment properties, while executor sales accounted for 15% of the market.

The research comes a day after two reports that also showed increases in house prices over the past year.

A survey by property website Daft.ie found that there has been a 7.6% increase in house prices across the country in the past 12 months, while rivals Myhome.ie predicted that house prices will rise by 5% over the course of 2016.

Ronan Lyons, Trinity College economics lecturer and author of the Daft.ie report, argued that, while the political focus may be on assisting first-time buyers with grants, it is more important to make construction more affordable to increase supply.