Price of a new house doubled in past five years

NEW houses have more than doubled in price in the past five years while second-hand homes have gone up by 40%, a new report shows.

At the end of 2013 the price of new homes was around €159,000 and existing ones €155,000 at the halfway point between the most expensive and the cheapest, known as the ‘median’.

But by September this year a new home had more than doubled to €330,000 while second-hand home prices had risen to about €217,000, the Banking and Payments Federation report shows. Experts believe the wide differ- ence is because the quality and location of new homes now makes them worth more. Demand for new homes was also given a boost under the Help-to-Buy scheme introduced in Budget 2018.

Housing campaigner David Hall, of the Irish Mortgage Holders’ Organisation, said of new builds: ‘They’re being built in different places, possibly cost more to build, they have a longer longevity. Someone buying a 30-year-old house knows they’re going to run into trouble.

‘It’s also where they’re building them, and outside Dublin as well and the main towns, nicer communities and easier to get in and out of town.

‘The banks should start partner-shipping with builders to do more social and affordable housing.’

And David Duffy, director of Property Industry Ireland, said: ‘With new housing at the moment, we’re seeing a lot being built in urban areas so they’re going to command higher prices.

‘Also with new houses, in recent years there’s a lot more regulation around them, so quality and insulation standards, that would account for some of the difference.

‘But to understand that difference, it’s where are the new builds taking place relative to the existing transactions.

‘The fact that viability of developments improved in Dublin first and the urban centres means that you’re probably going to get a lot of building where developers are going to make a return and, by its nature, prices in urban areas are going to be higher than outside.’

Economist Dr Ali Uğur, who studied the figures for the Banking and Payments Federation report, warned that at current building rates ‘it would take until 2021 for supply to meet the estimated demand of around 35,000 units per annum’.

Explaining the price gap between old and new houses, he said new houses were now built to far higher standards.

He added: ‘The second difference is the regional price differences, when you look at new builds most of it is taking place in Dublin.’