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HOUSES PRICES ACROSS the country are rising more than €2,000 every single month on average, according to the latest House Price Report from Daft.ie.
On a national basis, the average price of a house is €240,000 – 11.7% higher than at this stage last year.
In the last three months alone, house prices have risen 4.3% across the country.
Report author, and Trinity College Dublin economist, Ronan Lyons said that strong demand and a relaxation of Central Bank rules on deposits was contributing to the surge in prices but the high cost of construction meant that supply was struggling to keep up.
Dublin leading the way
The average house price in Dublin is higher than the national average for the first time in two years, at 12.3%.
The average price of a house in the city centre has risen sharply since last year, up 18.2% to €299,635.
The lowest rise was in the west of the country, with prices are up 7% to €297,070.
Lyons said that Central Bank rules on minimum deposits “had taken the sting out of a potential housing bubble” in recent years, which meant that Dublin house prices had previously not risen at the same rate as the rest of the country.
This has changed now, however, with the relaxing on deposit rules meaning that the minimum requirement is now just 10%.
The economist said: “This means that first-time buyers buying expensive homes have seen the biggest reduction in the deposit required.
To give an example, someone buying a property in Dublin worth €250,000 has seen the required deposit fall by just over 10% (from €28,000 to €25,000). But someone buying a property worth €660,000 has seen their deposit requirement fall by 40% (from €110,000 to €66,000).
“Therefore, we would expect the change in the Central Bank rules to have the largest effects on the most expensive markets in the country,” he said.
Around Dublin’s neighbouring counties, prices are rising steadily, but further afield in Leinster, house prices are rising at a higher rate.
House prices in Carlow and Laois, for example, rose 18% and 16.9%, respectively in the past year.
But other cities also on the rise
Outside of Dublin, houses prices in other Irish cities are rising at a faster rate.
Galway is the most expensive city outside Dublin to buy, with the average house in the city costing €268,535. This was a rise of 13.4% on the same period last year.
The rises were even more pronounced in Limerick city and Waterford city, with house prices rising 15.1% and 14.5%, respectively.
On a county by county basis, it was Longford which recorded the biggest rise by percentage, with the average house in the county now costing €128,816, up 23.5%.
The trends seen outside of Dublin would suggest that the help to buy scheme brought in by the government in the last Budget is not having the desired effect, according to Lyons.
He said: “There have simply not been enough new homes sold in the first half of 2016 for this to explain such market-wide trends, however.
The Help-to-Buy scheme would have had opposite effect across cheaper and dearer markets. Its caps were such that its impact would be greatest in the cheaper segments of the market.
Lack of supply
While the number of properties being listed continues to rise, strong demand means that the total number of properties on the market continues to be too low, the report said.
On 1 June, there were 22,400 properties listed. This is 11% lower than the amount on the same day last year, and roughly two-thirds below the 2008 peak.
Lyons concludes his analysis by saying that supply will need to be increased, and that the high cost of construction is acting as a barrier to home building in this country.
He said: “The primary focus of policy efforts in the housing market over the last 18 months has been to further stimulate demand and prices. As I have written on a number of occasions in the last year, what we need is a focus on supply and quantities.”
The country needs 50,000 homes a year, Lyons added, and said that supply has not been meeting demand since 2011.
“The principal reason why so few homes are being built is the high cost of construction,” he added.
Combined with a strategy for using vacant homes, using land better and reform of housing subsidies, it is entirely possible for this country to have a healthy housing system.
You can read the full report here.
TheJournal.ie publisher Journal Media Ltd has some shareholders in common with Daft.ie.
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Democracy is more important than ever as we see where the USA is headed. Wherever we were, they could be relied on to at least keep a free and open society as an ideal, in principle. That’s finished. The autocrats are on the march. The old world order is ending and the forces of anti-democracy, tyranny and hate are on the march. We are entering very very dark times.
@SerotoninWars: We’re never heading into good times, it’s literally never been said. Probs doesn’t generate enough ‘revenue’ across society.
@SerotoninWars: those which got into power both in the USA and in most areas in eu brought most of these issues now faced on us themselves. They’re stupidity and lack of forward long term planning and thinking has helped these so called far right actually gain momentum by allowing the likes of housing crisis to balloon altogether singlehandedly they have frustrated people to turn theyre thinking. In order to prevent far right gaining anymore ground,if thats what they’re actually trying to prevent, they need to concentrate solely on eu member states and how to serve those effectively not everyone outside of it. Halt immigration and only allow necessary people in for now such as health services etc. Get things in order get supply to one day meet demand then see about those outside eu.
@Thesaltyurchin: There are levels to it. The USA is highly imperfect and often hypocritical but it has, for a long time, been a bulwark for international democracy and rule of law. If there’s no pressure from the USA, this will do nothing but encourage the despots. If, as looks probable, Trump gets in, he will interpret the ruling today as a carte blanche to do whatever he likes. He’s too stupid and selfish to understand nuance. And with that Supreme Court behind him he’ll go much further with his stooges in ripping up the rule book. This is far more serious than the usual takes of political woe: it’s a disaster. Unless you wish to see the hardest right of governments, lots of unchecked power and dynasties emerging in former democracies.
@Paddy C: I agree that no matter what your politics, there’s going to have to be some new consensus with some painful decisions to avoid a slide into far right governments everywhere. There’s a huge difference between the protest vote scenario where people want a couple of specific things changed and a wholesale sweep to the far right who have a whole lot of other policies in mind too for when they get into power. So yes, I agree a new dynamic is required. Banging our heads off a brick wall will solve nothing.
@SerotoninWars: this is what people need to understand we have to find a happy medium somewhere otherwise it’ll go to far and the wrong people altogether will get in then we’re into a whole new set of problems we need to now take maybe what some would consider difficult decisions to avoid it.
@Paddy C: I agree. For people like me who lean left we have to remember that there’s a world of difference between centrist conservative governments you might not be fully happy with and actual far right parties. Parties that attract full blown fascists. There are many decent and kind conservatives. There’s no one like that in the far right. Worrying times as we need to generate pushback against the Putin’s of this world, not more allies for him.
Fair play to Cllr John Lyons Dublin City Council for calling out the extortionate prices for the ” affordable” homes in
the Coolock development. Free land given to the developer who screws the council with their money grabbing tactics.All done with the support of ffg and labour.
A certain individual a number of years ago remarked that irelands councillors and politicians ‘ make the mafia look like choirboys”.Democracy me a..e
@D. Peadar: when the general election comes anybody who isn’t usually pushed needs to get out and vote for the sake of it. Even if you don’t want to bother getting involved voting normally just make the effort this time if you want you’re children and generations to come having somewhat of a normal future prospect. In others words hope of a decent job which will cover having a roof over they’re heads and at some point if they wish to, a family and be able to survive and have that chance. Otherwise this country is doomed with a falling birth rate because of what’s just mentioned pension and health systems will without a doubt not be sustainable despite what horseshit comes out of the likes of roderic o gorman and the rest of those fairy’s in there.
Sums it up very well. This is being reflected in the decisions being made executive level and which elected councillors have no real say.
Excellent article
Our local councillors are really just administrators
Dublin ( city centre) is in serious decline because nobody is accountable or responsible
If we want to get people believing in democracy we need to make it much more powerful at a local level as that’s what affects people in their daily levels. We also need a much more interactive system than merely casting a vote every 4 or 5 years
Good article Pat! (Think Copenhagen built like 3 light rail systems during Coivd, certainly that needs a fact check tho lol!).
Well said Pat
The people have spoken and said they are very content with FFG, who regained control at local govt with the support of INDependents, Greens and Labour. #HappyPeople #HappyGovt #NoIssues
@9QRixo8H: Remember the 2019 local election went for FF/FG ? Then remember how the 2020 general election for FF/FG. It’ll tell you the local election means absolutely nothing. The next general election is all that matters.
@Ger Whelan:
A fair point Ger but in 2020 SF caught the mood of discontent and profited big time, and continued upward in the years since until recently, immigration and the recent referendums (especially the promise to run it again!) caught them badly.
It’s easier when you have momentum, extremely hard to turn it around when it’s going the other way
The whole western world is shifting right (except the UK!) Ireland is no different.
A backlash against the cost of green policies is another core factor in that rightward shift.
@Ger Whelan: There are only 3 parties running enough candidates to lead a govt, and the FFG duo maintained their support, so what do you think will happen?
@P. J.: It’s D.peader who needs this explanation not me
@9QRixo8H: They were well supported in the local elections in 2019 weren’t they? In fact overall the win more seats in 2019 than this year’s local elections. As for what happened? I don’t know. But I’m not here bragging how great things looked for any party am I?. Local elections mean absolutely nothing
@9QRixo8H: when the general election comes anybody who isn’t usually pushed needs to get out and vote for the sake of it. Even if you don’t want to bother getting involved voting normally just make the effort this time if you want you’re children and generations to come having somewhat of a normal future project. In others words hope of a decent job which will cover having a roof over they’re heads and at some point if they wish to, a family and be able to survive and have that chance. Otherwise ghis country is doomed with a falling birth rate because of what’s just mentioned pension and health systems will without a doubt not be sustainable despite what horseshit comes out of the likes of roderic o gorman and the rest of those fairy’s in there.
@Paddy C: vote for who? Majority want FFG. Birth rates are falling? If only we had immigration so men wouldn’t want to force women to give birth.
@9QRixo8H: they don’t need to force them just realise that when they’re born they might end up in a tent,b&b or hostel growing up for most of they’re lives. That’s no future at all and that is reality despite the horse crap that shower of utterly useless baffons in the dail are putting out.
@Paddy C: how can a young couple plan on having they’re own family and a home when neither can even afford to rent a room in a flat. They can’t so they’ve given up on that dream and are travelling abroad or trying to have that dream abroad,shame they can’t have it here when they,they’re families and friends all contributed into the tax system most of they’re lives.
@9QRixo8H: So you would prefer to have more Muslims here, who force women to do whatever they say? You simpleminded fkng dope.
SF were supposed to be the next big thing. Nobody knew for sure if they were far-left or far-right.
When the chips are down, people prefer the devil they know.
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