Friday 9 December 2016

Priced out: cost of new homes spirals

New builds rise €43,000 in a year - faster than second-hand

Published 26/11/2016 | 02:30

So far this year, work has begun on 8,220 units, an increase of almost 1,900 on last year. But in Dublin, where demand is keenest, the number of houses and apartments under construction has dropped (stock photo)
So far this year, work has begun on 8,220 units, an increase of almost 1,900 on last year. But in Dublin, where demand is keenest, the number of houses and apartments under construction has dropped (stock photo)

Newly built homes are costing an average of €43,000 more today than a year ago - raising serious concerns that young families are being priced out of the market.

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Fewer homes have been sold so far this year compared with the same period of 2015 and they are about 20pc more expensive, an analysis of the Property Price Register shows.

The average price paid for all homes this year is €240,240 - an increase of €22,000 or 10pc. A new build costs €260,600 - up 20pc or €43,000.

Experts warn that developers who focus on high-end homes are a problem in the housing market, which has failed to cater for first-time buyers (FTBs) since the economic collapse.

There are major concerns that supply will not meet the required 25,000 per annum.

So far this year, work has begun on 8,220 units, an increase of almost 1,900 on last year. But in Dublin, where demand is keenest, the number of houses and apartments under construction has dropped.

The figures come after changes to Central Bank lending rules aimed at encouraging developers to build reasonably priced 'starter homes'.

Housing Agency chief executive John O'Connor said it would be down to developers to judge as to whether there is a market.

"A number will provide houses under €300,000 in Dublin or close to it, if there is that FTB market, but they will be cautious and won't build speculatively," he said.

Irish Independent

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