Supply issues hurting housing market as prices set to rise, according to reports
Two new reports on the Irish housing market, commissioned by myhome.ie and daft.ie respectively, have warned of the shortfall in the supply of new homes across the country.
The lack of necessary housing units being provided will house prices to rise more than 5% by year end. According to the daft.ie report, this increase is twice that of the estimates made at the start of the year. The myhome.ie report, meanwhile, highlighted a stall in the rising price of homes after a surge towards the beginning of summer.
A normally reliable indicator of future price movements, the mix-adjusted price on newly listed properties rose nationally by 0.4%, and rose in Dublin by just 0.1%. In terms of year to date, the price of homes around the country is rising, with the average Dublin City price of €322,934 an increase of 5.3% and the average Waterford City price of €147,498 representing a rise of 16.4%.
Transactions, meanwhile, are falling due to the lack of supply with the figure down 5% over the first eight months of the year.
Angela Keegan, managing director of myhome.ie, says: “At this pace total completions for 2016 will be close to 15,000. This is well short of the 25,000 estimated necessary to meet demand from household formation. The reality is that in 2016 we will build the same number of houses we were building almost half a century ago in 1971. That simply cannot continue.”
Author of the daft.ie report, Trinity College Dublin economist Ronan Lyons, comments: “With this evidence, it is tough to argue that there is a compelling case for help for first-time buyers in the upcoming budget. This is particularly the case once the negative side-effects of further stimulating demand, in order to bring about more supply, are factored in […] Once the Budget passes, it will be time to focus on the far more important business of lowering construction costs in order to make new homes affordable for those on average incomes.”
