End of property slump sparks call for home building
THE Government has been advised to start planning for the building of new homes after strong signs that property prices have stopped falling.
The Daft.ie report says asking prices in Dublin and other urban areas have stabilised.
Dublin has fewer properties for sale than at any point since February 2007 – when the market first started crashing.
Stable prices and emerging shortages of family-type homes in Dublin, its suburban surroundings, and other populous areas, mean now is the time to plan for constructing homes again.
Too many homes were built during the housing bubble, but many of these were in locations far from urban areas, where most people work.
Daft.ie economist Ronan Lyons said prices in parts of Dublin were rising, with evidence of values stabilising in most urban areas nationwide.
"All the indications are that a balance has been reached in Dublin – and possibly in the other cities – between supply and demand.
"With the pull of cities stronger in the crash, the Government needs to start planning now for building the new homes the cities will need over the coming decades."
The Oxford-based economist admitted this may seem odd, given that the country is coming out of one of the worst housing collapses in the world.
"Property oversupply still blights much of the country, but the mistakes of the past should not mean avoiding making more mistakes in the future," he said in the Daft.ie report.
Construction experts said that just 7,000 new homes were being built a year at the moment, but population changes and the household formation that follows from it meant that some 30,000 new homes a year were needed.
The Daft report shows that asking prices for homes in Dublin were just 2pc lower in the last three months of 2012, when compared with a year previously.
A fall of 50pc in the numbers of properties for sale in the capital has emerged.
Dublin prices fell 2pc in the last three months of last year, and by 10pc in Cork, Limerick and Galway. But outside the cities there were falls of more than 13pc, as a two-speed housing market has emerged.
Mr Lyons also looked at sale prices recorded on the new property price register, which shows values have been stable now for the third quarter in a row. The average transaction price in late 2012 was €151,000.
The total number of houses for sale nationwide is now 47,000, its lowest level since November 2007.
MyHome has calculated the average asking price nationally at €201,000, down 51.5pc from the peak.