Estate agents expect house prices to rise by 5% in next year
Estate agents who are members of the Society of Chartered Surveyors Ireland (SCSI) expect national property prices to increase by an average of 5% over the next 12 months, a dip from the 6% forecast in January.
According to the latest SCSI Residential Mid-Year Market Monitor, more than half of agents believe the key factor influencing house prices over the next year will continue be the supply – or the lack of supply – of new housing.
88% of agents believe current residential property prices are expensive or very expensive – up 5% since January – while just 12% believe they are currently fair value.
60% of respondents also said they believe prices are increasing but will level off soon, while 18% believe they have peaked and should start to decline.
Property prices nationally having increased by 164.8% from their trough in early 2013, according to the Central Statistics Office.
The SCSI include five scenarios involving a couple’s earning a combined income of €107,000 in the latest monitor. The purchase prices are average purchase prices of three bed semis from the society’s survey based on new housing developments in the five relevant counties – Meath, Kildare, Wicklow, Cork and Galway.
The scenarios demonstrate the affordability gap, if any, which exists between the total mortgage purchase limit available to a couple on a garda and nurse income looking to buy their first home based on average new house purchase prices in five different locations.
According to these scenarios, a couple on a combined salary of €107,000 who want to buy a new privately built 3-bedroom semi-detached home and who have the 10% deposit having availed of the Help to Buy Scheme along with their savings, will afford to buy in only one of the five locations, namely Cork.
The case studies indicate prospective buyers in Wicklow will face a shortfall of almost €65,200 while in Kildare the figure is €22,000.
Gerard O’Toole, President of the SCSI, said the new figures show that affordability has become more challenging across various house types and locations.
“While a new 3-bedroom semi-detached home is affordable in Cork and buyers with additional savings beyond the 10% loan-to-income limit should be able to overcome the gap in Meath and Galway, new 3-bedroom semi-detached homes in Wicklow and Kildare remain totally out of reach for people on these salaries,” Mr O’Toole said.
“In addition, there are thousands of people on lower salaries who will not be able to buy and will require support,” he said.
“These findings highlight the persistent structural barrier which exists to homeownership, even for dual-income households in stable public sector roles. It also underscores broader concerns around housing sustainability, increasing commuter burdens and the potential impact on quality of life,” he added.
He also said that the lack of new home building across several regions is something many members commented on in today’s report.
“This is something the Government needs to address through various measures including targeted supports to unlock brownfield sites. If we are to move the supply dial, we also need to see compact growth targets set for local authorities with regular reporting requirements on planning approvals and completions,” he said.
“While the increased budget for housing and key infrastructural projects announced last week in the revised National Development Plan is most welcome, the success of the plan will be measured by target delivery. That is the litmus test of any plan,’ Mr O’Toole concluded.
Article Source – Estate agents expect house prices to rise by 5% in next year