Drastic thinking needed on building of family homes
THE latest house price figures from the CSO underline the markedly different behaviour of two markets. Dublin house prices are up 10.6pc for the year and are rising at the rate of almost 2pc per month, while throughout the rest of the country property prices remain flat with growth of 0.1pc in August but prices 2.6pc lower for the year to August overall.
The pace of price increases in the Greater Dublin Area (GDA) must now raise concern that this market is becoming somewhat overheated. The problem stems directly from a shortage of family homes given that not enough of them were constructed to meet demand from a growing population through the past decade. In the latter years of the boom high density apartments, which were not suitable for families, were the favoured build.
Estate agents estimate that the current supply of homes in the Dublin market is running at about one third of what is judged to be normal. This shortage has combined with a flood of pent-up buyers to market to compound the problem. One estate agency network recently estimated that more than 50pc are now buying with cash in Dublin. These buyers are not accounted for by the CSO statistics. Therefore the real figure for Dublin inflation could conceivably be even higher.