First-time buyers get foothold on ladder despite price rises
First-time buyers are finally getting a foothold in the property market as the proportion of buy-to-let investors declines.
However, property prices continued to grow strongly throughout 2017 with the shortage of supply an ongoing problem.
Figures from Sherry FitzGerald confirm that following growth of 1.5pc in the fourth quarter, the average value of residential property rose by 8.4pc over the course of 2017. This compares to an increase of 5.2pc recorded in 2016.
The major cities all experienced growth over the 12-month period, with Dublin the highest.
Owner-occupier levels remained strong during 2017, accounting for 72pc of all purchasers.
Crucially, first-time buyers represented half of these, according to the estate agent.
Marian Finnegan, chief economist at Sherry FitzGerald Group, said: "A strengthening economy, strong employment growth and notable demographic pressures have all led to significant upward pressure on the demand for housing. This has resulted in a period of heightened price growth.
"This is most notable in the established housing markets of Dublin, Cork, Limerick and Galway, where the supply-side pressures are most apparent.
"That said, it is worth noting that the average value of new home dwellings sold in the first nine months rose by a modest 1pc in Dublin, illustrating the positive impact of the 'help to buy' scheme."
An analysis of the profile of vendors and purchasers, who sold their property through Sherry FitzGerald in 2017, reveals a similar pattern to recent years.
Many vendors were selling investment properties, while investors entering the buy-to-let market represented only 20pc of purchasers in the established housing market.
Ms Finnegan added: "The uplift in activity in the new homes and mortgage markets is a positive endorsements of the Government's 'help to buy' scheme and the Central Bank's relaxation of the macro prudential rules in 2016.
"That said, more measures aimed at rapidly increasing supply in all locations are required, if we are to reduce the pace of price inflation."
The latest available data from the Property Price Register reveals that just over 37,500 transactions were recorded during the first nine months of 2017.
In Dublin, the volume of sales grew by 10pc, with approximately 11,400 transactions. Dublin accounted for 41pc of total sales of new homes.
On a positive note, new dwelling transactions were up 27pc when compared to the same period in 2016.