Housing shortage: Just 3,000 properties for sale in Dublin at present
Divide between capital and rest of country continues to grow
Published 02/01/2014 | 02:30
THERE are just 3,000 properties for sale in Dublin at present - down 30pc from the same time last year.
This is despite the fact that Dublin clearly dominates the property market -- over a third of all transactions in the first nine months of 2013 concerned Dublin, new research has found.
And the divide between Dublin house prices and the rest of the country will continue to widen and could extend to Cork if the supply of houses does not improve this year.
There is now a 28pc difference between Dublin property asking prices and the national average, the study by property website Myhome.ie found, up from a 17pc difference just a year ago.
This trend, researchers said, shows no signs of stopping.
"While the rate of decline in prices nationally continued to moderate throughout 2013, price increases in the capital, due in large part to a shortage of supply, has meant the divergence between Dublin and the rest of the country is growing and looks set to widen further in 2014," said economist Caroline Kelleher.
An acute shortage of suitable housing will feed the widening price gulf, the research found.
"We are also seeing very low volumes of house building and planning permission being granted for apartments, when there is a clear demand for family homes," said Myhome.ie's managing director Angela Keegan.
This lack of supply is unlikely to be solved anytime soon. Work began on just 789 new homes in Dublin in the first 10 months of last year, according to the Department of Environment.
"Although this is significantly up from the same period in 2011 and 2012, it is considerably below the level required," said a report on the findings. The CSO estimates that Dublin's residents will need an extra 10,000 homes by 2016, given that the capital's population is forecast to reach 1.3m by then.
Though a divide between Dublin and national house prices has been clear for many years, statistics show that the gulf widened sharply in 2012 and continued to accelerate in 2013.
According to the Myhome.ie research, the average asking price in Dublin rose by 2.4pc in 2013, the largest annual increase in seven years, to €241,392 by the end of December. South Dublin city saw the largest increases, with asking prices up 8.6pc in the year.
In contrast, the national average asking price fell during the year, down 5.6pc to €189,086. The figures differ from those supplied by the CSO because it only takes mortgaged purchases into account, and does not consider cash buys.
This disparity between Dublin and national house prices, the report found, could soon extend to Cork. Cork house prices, it said, have now bottomed out.
Average asking prices for both Cork and Cork city were steady this year, unchanged at €190,000 and €195,000 respectively.
"The price increases we are seeing in Dublin are unsustainable over the medium term and we don't want to see the same pattern emerge in Cork and Galway," said Ms Keegan.
However, some factors may limit the risk of price increases.
"It is clear that the mortgage crisis is far from over," the research said, suggesting that a rise in the number of repossessions could create more supply to the market. Inflation remains low, it added, and many consumers are heavily indebted with only modest income growth anticipated for the coming year. This should lower demand.
And further declines still look likely for other urban areas, like Limerick and Waterford.
By Sarah McCabe
Irish IndependentFollow @Indobusiness