HOUSE PRICES AND RENTS RISING AS THE DEMAND FAR EXCEEDS THE SUPPLY
STATISTICS ON HOUSE PRICES VARY DEPENDING ON THE SOURCE, BUT THE FACT REMAINS THAT LOCAL BUYERS AND RENTERS FACE AN INCREASINGLY HARSH REALITY DAVID TUCKER REPORTS
TWO different reports on property prices and sales have been published this month, one based on sellers’ aspirations and the other on actual sales.
Not surprisingly the figures being quoted vary considerably, but where there is common ground is that prices are rising and the numbers of first-time buyers are not, that rents are going up and demand far exceeds supply because too few new houses are being built.
The net effect of this is that many firsttime buyers are being priced out of the market and renters face an uphill battle to find a house or flat.
And those receiving social welfare payments are even worse off as the gap grows between what they are able to pay, even with their allowances, and the rents landlords are asking for.
Wexford auctioneer Colum Murphy, from Kehoe and Associates, said a newly-published IPAV report put the price of an average three-bed semi in the county at €145,000 - but in reality a new three-bed semi would cost in the region of €185,000 to €200,000 ‘if you can find one because there is no availability’.
‘When I compare the figures to the reality when I look across the websites, I think we are looking at an opinion-based report rather than actuality, with about a 10 per cent variance in prices,’ he said of the IPAV figures.
Mr Murphy said any three-bed semis that were coming on to the market at the lower end of the price range were most likely ex-rentals being off-loaded by over-taxed landlords which would need thousands spent on them. ‘A landlord might be renting a house for €900, but in reality and because of the high rates of tax and PRSI, he or she is only netting €400,’ Mr Murphy told this newspaper.
Quoting CSO ‘transaction-based’ figures for the four districts in the county for the first seven months of the year, he said the Wexford average was €165,000, Enniscorthy was slightly higher at €150,000, Gorey at €178,000 and New Ross at €127,000.
‘I have two observations, the first is that the numbers of first-time buyers are reducing compared to the same period last year and there are reducing numbers of investors purchasing to rent out,’ he said.
Mr Murphy said the percentage change in overall house prices in the region showed a 14.6 per cent increase over the past 12 months, compared to a 6.7 rise in the previous 12 months ‘so there definitely is acceleration’.
According to the IPAV survey, Wexford house prices rose on average by 15 per cent, from €97,537,928 in the first half of 2016 to 112,276,169 in he first half of this year. It said the percentage increase in Wexford is slightly lower than the Leinster average rise of 16 per cent.
In neighbouring Wicklow, prices have risen by 25 per cent over the same period, from €192,628,249 to €240,139,165. Waterford averages have risen by only two per cent to €86,365,937.
Clare and Donegal are the only counties where prices have gone down, by 19 per cent to €82,851,109 and €67,785,830 respectively.
The MyHome figures say the number of sales
“A landlord might be renting a house for €900, but because of the high rates of tax and PRSI, he or she is only netting €400” COLUM MURPHY KEHOE AND ASSOCIATES
in Wexford rose by 11.3 per cent from 681 to 758, while the number of sales in Wicklow rose 20.7 per cent from 608 to 734.
The only county in the South East to reflect a fall in sales was Waterford, where the numbers dropped by two per cent, from 620 to 607.
The study based on an analysis of the Property Price Register shows that the number of sales nationally has increased by 8.4 per cent in the first half of 2017, compared to the same period last year.
The study shows that there were 23,148 sales nationally in the first half of the year. The value of those transactions also increased significantly, rising from €5.1bn to €5.8bn, an increase of 15 per cent.
Unsurprisingly, it was Dublin that led the way in the first six months of the year with 7,455 sales – an increase of 11% on the 6,717 sales recorded for the same period last year. The amount of money spent in the capital also grew by 13.2 per cent, from €2.7bn to over €3bn.
Angela Keegan, Managing Director of MyHome.ie said the overall increase in sales in the first six months was a move in the right direction for the property market.
‘In 2016 there were over 48,000 house sales and we think that if current trends continue we should comfortably exceed 50,000 sales this year.
‘The rise in sales and values in the commuter belt is the standout feature in these figures and indicates that the lack of supply of affordable houses is pushing buyers out of Dublin. We can see that the number of sales in Meath is up 43 per cenrt while the value of transactions is up 47 per cent. In Wicklow sales are up 21 per cent while values are up 25 per cent.’
‘The downside of this trend and something which has been highlighted in recent reports is the increase in commuting times for people working in Dublin,’ she said.
Ms Keegan said speculation around the future of the Help to Buy scheme had caused unnecessary uncertainty in the property market.
‘This initiative was introduced as a supply side initiative to encourage the construction of affordable homes. We are seeing a lot of new developments coming on stream now and that is something which really needs to continue if we are to get to grips with the current housing crisis.
‘Help to Buy on its own won’t solve the crisis – we need a coordinated package of measures for that – but abolishing it would be a retrograde step,’ she said.