House prices going ‘one way’ as lack of supply frustrates market

THE price of the average three-bed semi in Kerry has risen 6.4% to €207,500 in the last year, that’s according to a recent national survey carried out by Real Estate Alliance (REA).

Kerry recorded a 0.5% increase in the past three months which reflects the ‘upward only’ trend in house prices over the past two years which has put pressure on availability. The REA Average House Price Survey concentrates on the actual sale price of Ireland’s typical stock home - the three-bed semi - giving an up-to-date picture of the property market in towns and cities countrywide to the end of September 2017.

For example, in Killarney prices have risen 3.9% in the last year to €265,000, while Tralee has seen an 11.1% increase to €150,000 in the same period.

The cause of the increase is primarily targeted at the lack of supply which Donal Culloty of REA Coyne & Culloty in Killarney says is stalling the market in Kerry. This is causing a spike in house prices with demand increasing from both an investor and home-buyer perspective.

Overall, the average house price across the country has risen by 11.2% over the past 12 months – just under twice the 6% increase registered to the full year to September 2016.

Other factors thought to be driving an increase stem from what’s described as a ‘vicious circle’ whereby families looking to trade up are not seeing the larger homes becoming available, while empty nesters looking to downsize do not have a ready supply of smaller homes emerging on the market. Added to this is the dearth in supply for first-time buyers who are not seeing the three-bed semis coming through in sufficient numbers.