PROPERTY PRICES IN Dublin increased by nearly 20% in 2014, but slowed down in the final quarter of last year due to uncertainty surrounding the Central Bank’s new rule on 20% deposits.
According to the national survey by the Society of Chartered Surveyors Ireland of over 400 estate agents, property values are estimated to have risen by approximately 14% nationally last year.
In Dublin, property values are estimated to have risen by 19.5%. If you exclude Dublin, Leinster values are estimated to have increased by 15.8%, while in Munster and Connacht/Ulster they rose by 9.6% and 10% respectively.
Too restrictive
The increase moderated in the second quarter, with 80% of respondents stating that the bank’s LTV proposal is too restrictive and recommending a deposit in the 10% to 15% range.
Simon Stokes, Chair of the SCSI’s Residential Property Professional Group the new deposit rule will impact Dublin the most, where he said property values are higher than other parts of the country and where buyers have to raise a much larger deposit.
We now need clarity around the proposed measures so that people wishing to buy can plan ahead and avoid further uncertainty.The proposal is also causing apprehension among builders planning new housing developments, which the market urgently requires.
While he said the SCSI agrees with the objectives of the Central Bank, it would rather see a deposit in the range of 10 to 15% being required.
Cash buyers
According to the study cash buyers accounted for 40% of all residential sales in 2014 but SCSI members expected this level to fall in 2015 as the level of mortgage lending approvals increases.
For the year ahead, the SCSI said the pace of property price inflation is expected to moderate in 2015 to 5-10% nationally.
The survey also looked at rents nationally.
In Dublin, rents increased over the course of last year by an average of approximately 15%, in Leinster by 13%, in Munster by 8% and in Connacht/Ulster by 9%.
“While rents are still approximately 5-10% off peak levels in prime Dublin locations, the continued increase in rents is threatening our economic competitiveness” Mr Stokes said.
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