All areas to see property price gains this year
Published 23/01/2014 | 02:30
PROPERTY prices will continue to rise this year in all regions of the country.
The recovery will be led by larger urban areas but will be seen in house prices and rents in all parts of the country, the Society of Chartered Surveyors Ireland, which represents estate agents and valuers, said.
Prices were up in all regions last year, with Dublin seeing increases of close to 16pc.
But outside the capital there were price hikes of 5.7pc, the society said after surveying 400 estate agents.
It estimated prices increased last year by an average of 8.1pc in Munster, 4.6pc in Leinster and went up 3.9pc in Connacht/Ulster. The report was compiled by Amarach Research for the society.
Chief economist with Goodbody Stockbrokers Dermot O'Leary, who reviewed the survey, said 2013 will go down as the year of the recovery in residential property prices.
But he said that given the level of cash transactions, it was largely a credit-less recovery. "Renewed consumer confidence has been a key trigger for the recovery," Mr O'Leary said. He said the society's survey showed estate agents saying that mortgage finance became more available during last year.
The key issue in 2014 will be supply of properties for sale, the economist said.
But Mr O'Leary warned it would be naive to think that the market will cure all its ills.
He urged the banks to provide more options for people in negative equity or with tracker mortgages as this would free up the market overall.
"While development financing is available for house building, this survey suggests there is a 35pc to 40pc equity gap and we cannot or should not expect banks to shoulder all that risk. The construction sector should try to tap into the interest which exists for investment in Ireland to fill that gap," he said.
Simon Stokes of the Chartered Surveyors Society said property prices were stabilising and recovering in urban areas, with the regions languishing behind.
The majority of estate agents were forecasting further price increases in urban areas due to a lack of stock and improvements in sentiment this year.
But Mr Stokes said future policy needed to take account of the different factors driving demand across the regions in what has become a multi-tiered market.
"In Dublin and parts of Cork, supply is the key driver of increasing prices, but in Munster it's availability of finance while in Leinster it's greater consumer confidence."
The lack of movement in the property market means fewer secondhand family homes are coming on the market (which) together with the absence of new house and apartment building is having a big impact on the property markets, especially in cities.