Experts: The rise in house prices shows no sign of slowing

Properties being snapped up as availability dwindles

HOUSE hunters have been told to expect huge hikes in asking prices across Ireland over the next year.

The revelation comes as a survey showed the average asking price of a house in Dublin rose by €32,000 in just six months.

Research published today by property website myhome.ie also revealed that newly listed house prices across the country rose by €24,000 during the same period.

Newly listed properties are seen as the most reliable indicator of future price movements.

And the report revealed asking prices across the country surged 5% in the second quarter of this year, and 8.9% on the year; in Dublin, the prices rose by 2.8% and 10.3% respectively.

The report’s author, Conall MacCoille, who is the chief economist at Davy, said house price inflation remains on course for double-digit growth. Mr MacCoille added: ‘The outlook for Irish house price inflation will be primarily driven by robust jobs growth, rising incomes and competition among homebuyers, leading to more highly leveraged mortgage lending.’

The survey found that the average asking price of houses in the capital increased from €328,000 to €360,000 in the first half of this year, while across the rest of the country the average price rose from €227,500 to €251,500 over the same period.

Last July, myhome.ie revealed that the average asking price for a house in Dublin city during the second quarter of 2016 was €326,000. The average price for the rest of the country was €231,000.

Residential properties are also being snapped up in record time with Dublin sellers waiting on average 2.8 months to find a buyer while, outside of the capital, the waiting time is 3.8 months, the new report produced in association with wealth management firm Davy reveals.

Although Mr MacCoille said that the likely abolition of the Help-toBuy scheme in the upcoming Budget would have no real overall impact on the rising demand for homes, he claimed the scheme has contributed to rising prices.

He said: ‘The likely demise of Help-to-Buy could lead to a rush of transactions in 2017 as firsttime buyers move quickly to avail of the scheme and to a slowdown in 2018 as it is phased out.

‘Nonetheless, the bigger picture is that Irish house price inflation should remain robust, driven by the recovering economy.

‘The 1,679 Help-to-Buy claims approved to date have cost €24.5million.

‘This means that the average Help-to-Buy cash rebate has equalled €15,000, or 5% of a €300,000 newly built home.

‘Given the 7,275 applications received so far, the initial estimate that the scheme would cost €50m may now seem conservative.

‘Did Help-to-Buy contribute to house price inflation? What evidence there is suggests it did, as the price of newly built homes is rising much faster than existing dwellings.

‘Of course we have also seen a pickup in lending – in Q1 the average mortgage loan to first-time buyers rose by 9.5% to €194,000 – and this must in part reflect the relaxation by the Central Bank of mortgage lending rules late last year.’

For the entire stock of properties listed for sale on myhome.ie, prices rose 2.8% nationally and 3.2% in Dublin.

Myhome.ie managing director Angela Keegan said she expects competition for properties to intensify.

She said: ‘There were only 21,000 homes listed for sale on myhome.ie in Q2, down over 11% on the year. This means that just 1% of Ireland’s housing stock of two million homes is currently listed for sale.

‘In Dublin, where demand is greatest, fewer than 4,000 homes, or 0.85% of the capital’s stock, is listed for sale. Not surprisingly average time to sale agreed for homes has fallen to 3.8 months nationally and just 2.7 months in Dublin.

‘These are the lowest times we’ve seen since we began recording these figures in 2011.’

The report also found that 638 homes in Ireland sold for over €1million last year.

The vast majority of the sevenfigure sales – 547 – were in Dublin, with Cork recording 21, Wicklow 18 and Galway 12. Property – Page 44 peter.doyle@dailymail.ie