The lack of new homes in Ireland is “deeply worrying” and is contributing to the challenges faced by first-time buyers trying to enter the market, according to Brokers Ireland.
In August 2019, just 670 new build homes were sold nationally — a 9.1% drop in comparison to the same month in 2018. The figure was revealed in the CSO’s latest Property Price Index.
The release also shows that first-time buyers accounted for less than one-third of household purchasers in August 2019.
The report states the price inflation has slowed to 2%, its lowest level in six years. Prices in parts of Dublin are declining, with Dun Laoghaire-Rathdown dropping by 6.1% in comparison to the year ending August 2018.
This report covers the period ending August 2019. For the 12 months ending August 2018, inflation was 8.9%.
Residential property prices excluding Dublin were 4.4% higher in the year to August. The region outside of Dublin that saw the largest rise in house prices was the border at 13.1%, while the mid-east recorded a decrease of 0.8%.
Households paid a median price of €255,000 for a dwelling on the residential property market in the 12 months to August 2019.
The Dublin region had the highest median price (€367,500) in the year to August. Outside Dublin, the highest prices were in Wicklow (€323,500) and Kildare (€302,000), while the lowest price was €103,543 in Leitrim.
The report also breaks down prices by Eircode. All 10 of the most expensive Eircode areas in the country are in Dublin. In Munster, Kinsale (€340,000), Cork southside (€295,000), Ballincollig (€320,000), and Glanmire (€268,500) are the most expensive areas to buy.
Overall, the national index is now 17% lower than the highest level in 2007 and has recovered by 85.2% since the low point in 2013.
New dwellings remain a small portion of the market. Of the 3,947 purchase orders filed with Revenue in August, 83% were existing dwellings. Just 670 were new completions, a 9.1% decrease in comparison to August 2018.
Brokers Ireland, which represents 1,250 brokers in Ireland, described the report as “deeply worrying”.
Rachel McGovern, director of financial services at Brokers Ireland, said that first-time buyers should represent a much bigger segment of the market.
Many are forced to remain in rented accommodation, she said. First-time buyers represented just 31% of purchasers in the year to August, with non-occupiers, such as investment funds, representing 16%.
She said at a time when it is estimated that 35,000 new homes are needed every year, it is “deeply worrying” that the number of new dwellings transacted is continuing to fall. New builds accounted for just 17% of the houses sold in August 2019.
“Affordability is a huge issue, and despite what is acknowledged as a housing crisis, no real inroads have been made into addressing it,” Ms McGovern said.