Housing supply at worst level for 50 years as prices exceed boomtime levels
Published 11/07/2016 | 02:30
Supply of Irish homes for sale has reached the worst level in 50 years, estate agents are warning.
And in further signs of a dysfunctional market, prices in some parts of the country are rising at a faster pace than during the boom - while in the capital they have flatlined.
According to June's Irish Independent/Real Estate Alliance Average House Price Index, the average three-bed semi now costs €195,361. It is an increase of over €4,000 (+2.18pc) since the end of March, or 4.49pc against the same time last year.
Sale prices of average semi-Ds soared as much as 14pc in Roscommon, 8pc in Laois and 7pc in Kilkenny, while there were no price rises in Cork City or north County Dublin.
Dublin city centre prices rose by just 1.4pc, while in the south of the county they were up by 2.1pc - slightly ahead of 2pc for Galway city.
The REA network, which represents estate agencies in all counties, cites lack of supply and bank lending regulations which are now causing city buyers to skip beyond even the commuter belt.
Recent property reports have suggested supply may be starting to improve. However, the REA says shortages, which have seen supply run at 20pc of what is normal in some locations, are in fact worsening.
Some agents around the country have sold so few properties in that quarter that they questioned whether such a low base figure could provide an accurate barometer for prices.
"We are seeing firms which are in business for 50 years which have never experienced such a low level of supply, and this is responsible for causing sharp increases in prices in some areas over the past three months," said REA Chairman Michael O'Connor.
Among the steepest rises were for semis in Kilkenny city, which rose by €20,000, or 12.5pc, in the past three months, a figure that is entirely driven by record low supply, according to Michael Boyd of REA Boyds.
"We opened 170 residential files in 2000 - so far this year we have opened 16 and only half of these have actually gone on the market," said Mr Boyd.
"Our analysis of the Price Register tells us that there are 15 fewer units per month selling in the county than this time last year - and that this is the lowest level since these records began.
"We desperately need new building to start, especially as prices for quality stock are now well into viable levels for builders to commence."
Harry Southern, of REA Southern, Carlow, said while there is a steady supply of second-hand housing coming in, this is the first time since the 1980s that they have had no new homes for sale. Healy Hynes of REA Hynes, Athlone, said while supply is up on this time last year, in the context of historic norms it is still at "famine" levels.
REA Chairman Michael O'Connor said: "There is no doubt the major factors affecting the Irish property market at the moment are supply of housing, the Central Bank restrictions, the banks' mortgage lending policies and high rents."