HOUSE PRICES ROSE by 8.6% nationally in the twelve months up to the end of June, new data from the Central Statistics Office (CSO) has shown.
Prices in Dublin increased more than in the rest of the country, with house prices rising by 10% and apartment prices going up by 6.6%.
This compares to a rise of 8% and 10% in house prices and apartments respectively across the rest of the country.
The monthly rate also increased, with prices rising by 0.7% in June compared to 0.4% in May.
The highest house price growth in Dublin came in Dublin City (11.7%), while Dún Laoghaire-Rathdown saw a rise of 8.5%.
House prices in Clare, Limerick and Tipperary also rose substantially by 12%, according to the CSO’s data.
National prices are now 10.8% above the peak of the property boom in April 2007, though property prices in Dublin are 0.7% lower than their peak in February 2007.
Expected to rise further
The CSO’s data follows a new mid-year report from the Society of Chartered Surveyors Ireland (SCSI) that shows estate agents expect house prices to increase by an average of 4.5% over the next 12 months.
This figure is up from the 1% increase forecast by SCSI estate agents for 2024 back in January.
Three out of four agents report low stock levels, with almost half (46%) believing the key factor influencing house prices over the next 12 months will be the supply of new housing.
Gerard O’Toole, Vice President of the SCSI, said the clear message from the report was the urgent need to increase supply.
“Our members are seeing the impact of the lack of supply on the ground and believe this shortage will continue until annual completion levels ramp up significantly. A year ago, 35% of agents identified the lack of supply as the main issue for the price movements, now that number is 46%”, he said.
Other factors impacting price movements according to agents include the state of the economy, interest rates and the availability of credit, access to schemes supporting house purchases such as Help to Buy and changes in the levels of immigration and emigration.
Agents are also concerned about the number of houses going sale agreed but are not proceeding to completion, O’Toole said.
“They believe delays caused by planning irregularities, non-compliance with building regulations as well as delays regarding probate and accessing property deeds are continuing to pose challenges”, he added.
Affordability
As part of the new report, the SCSI conducted an affordability test in five areas of the country for a couple on average incomes looking to buy their first home.
The five scenarios selected looked at the average purchase price of a new three-bed semi in Meath, Kildare, Wicklow, Cork and Galway.
According to the SCSI’s findings, a couple with a combined salary of €107,000 and a 10% deposit saved having availed of the Help to Buy scheme would only be able to afford to buy in one of the five locations — Meath.
While the figure for Meath is still negative, the SCSI says affordability in this case could be met under the First Home Scheme.
Prospective buyers in Kildare and Wicklow, however, face significant shortfalls in this scenario, with O’Toole saying “The figures showed the massive challenges facing first-time buyers in the current market”.
The affordability test for a two-bed terraced house was more positive, with the same couple able to purchase in four of the five scenarios without assistance under the First Home Scheme. Only in Wicklow was support from the First Home Scheme needed to meet affordability.
The SCSI also included a rental affordability analysis for the first time, with the report looking at a family renting a 3-bed semi or 2-bed terraced home in the same five locations as above.
For 3-beds, rents ranged from €2,139 in Meath to €2,475 in Wicklow, while rents for a 2-bed terraced house ranged from €1,733 in Galway to €2,061 in Wicklow, according to the report.
O’Toole said, “These figures show just how challenging it is for a family to rent a home in Ireland and the minimum salary level required”.
Responding to the report, Sinn Féin housing spokesperson Eoin Ó Broin said “today’s SCSI residential property report confirms the need for a radical reset of housing policy. The report’s affordability analysis shows that a couple earning over €100,000 would struggle to buy a new three-bedroom home in many parts of the state”.
“Sinn Féin has long argued that the private residential development model in the state is broken”, he added, arguing that “bad government policy and failure to deliver affordable homes is pushing up house prices”.
Sinn Féin published its affordable homes policy document earlier this month, pledging affordable homes for households earning under €90,000, though this salary cap was criticised by the government with Housing Minister Darragh O’Brien saying the document “raises more questions than it answers”.
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