Sunday 22 October 2017

Lack of family homes is no longer just a Dublin problem

Mark Keenan

Mark Keenan

THE latest Average House Index shows us that family home shortages have almost overnight become a real issue in our regional towns and cities and that competition for too few houses is no longer just Dublin's problem.

As regional property markets recover from some of the worst value falls ever experienced in Ireland, postponed buyers in the towns have moved into the market en masse to encounter the unexpected - that after six years in which almost no homes new homes have been built (because they weren't selling), there aren't enough properties to go around.

While value surges of one third and more may seem alarming, it is worth remembering that semi detached prices in some counties had fallen by as much as 70pc.

Even with the recent value increases, homes in many counties are still worth far less than it actually costs to build them.

Semi-detached houses in Laois may have jumped by 44pc in value and in Longford by 37.5pc but the prices in these counties now stand at €115,000 and €55,000 respectively. Compare this with the €380,000 cost of a semi in Dublin city.

This big bounce from the bottom is essentially a temporary fixture, but until property prices rise to a level where builders will once again start construction in towns, further value increases are likely to follow.

Dublin's case is an altogether different one. For the most part estate agents aren't certain what the impact of the recently clarified Central Bank measures will be. The capital saw value increases ease off in the last quarter of the year and many asking prices were cut as vendors attempted to sell initially over pitched homes before year's end.

There is a sense that the Central Bank measures will certainly have a big impact in a city where almost all family homes are above the €220,000 20pc deposit threshold and where almost none can be purchased for the new 3.5 times income enforcement.

Whether prices will stay flat for the year ahead remains to be seen although most estate agents believe single digit percentage growth is likely in most Dublin areas as buyers save up more money or source cash from parents or elsewhere.

There is also of course a possibility that Dublin city prices will fall - as evidenced by the 7pc drop in Lucan highlighted here.

What the Real Estate Alliance study also shows is that buyers have already been spilling out of Dublin into the commuter counties in search of more affordable family homes.

It surely won't be long before towns in counties like Meath and Kildare see their average family home prices nudge up to that €220,000 threshold.

At one scheme in Bettystown, County Meath, the average semi is already selling at €225,000.

Overall nationwide it's a tale of two, if not three very differently performing property markets, all moving in different directions.

Irish Independent

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