DESPERATE RUSH FOR HOMES IN NEW COMMUTER BELT
Soaring prices force families to buy homes hours from places of work
SOARING property prices have sparked a massive rush for houses in a ‘new commuter belt’ as workers are forced to accept longer and longer commutes in order to buy family homes. Prices across the new commuter belt of Laois, Longford, Offaly and Westmeath have jumped a whopping 15% in the past year, making it the fastest growing area in the country, Government figures revealed yesterday.
People desperate to escape the Dublin rent trap and find an affordable home are attracted by the counties’ average house prices of around €150,000, which
is about one third of the capital’s average prices. Just days ago, desperate house-hunters started queuing in the rain at 6am on Monday, outside a new development on the outskirts of Dublin that does not go on sale until today.
The queue of potential buyers for 24 homes near Clonsilla in west Dublin, is reminiscent of Celtic Tiger sales where scores of people would camp outside new developments to snap up properties. The key difference is that today fewer houses are being built.
The Tiger-era scene provided a vivid backdrop to the announcement yesterday by the CSO that house prices rose nationally by 12.5% over the past year to an average of almost €280,000.
Brokers Ireland director Rachel McGovern slammed
‘Long, expensive commutes’
the exodus of families from Dublin as ‘effectively a type of involuntary social engineering’.
‘With rapid house price inflation, particularly in Dublin, many seeking homes are being pushed further and further away from their places of work and, in many cases, families too, with long and expensive commutes,’ she said.
‘Home ownership achieved at affordable prices is critical to growth in personal wealth over time. Many in their 20s and 30s are being deprived of this opportunity, previously considered the norm. This, in time, is going to have a huge cost personally, economically and socially.’
Average house prices in Laois are €164,000, Longford €100,000, Offaly €151,000, and Westmeath €160,500, and were up by 14.8% in the past year, official figures show. The national house price average is almost €291,000 and in Dublin is more than €431,500.
Ireland’s population is growing. ing nationally by 1.1% a year, but in the commuter counties it is growing faster at 1.6%, fuelling the strong demand.
AA Roadwatch regularly warns of delays on the M7, one of the country’s busiest stretches of motorway after the M50. The M7, which runs through the Midlands, is currently being widened between Naas and the M9 junction to cope with the demands of extra traffic.
Dr John McCartney, Savills estate agents’ director of research, said: ‘Midlands locations are generally speaking still cheaper than in the cities, so that’s where you’re going to get strong price inflation.
‘Undoubtedly the commuting is getting longer, and is compounded by the fact that there’s road-widening works on the M7, which will improve things when it’s finished but causes a problem while it’s going on.’
The move out towards commuter counties is being caused by spiralling prices in Dublin.
Dr McCartney explained: ‘The first thing is price growth: we’ve had a strong increase; the second thing is lending conditions have tightened and people can’t borrow as much, notwithstanding the fact prices are going up sharply. And the third thing is, incomes haven’t really adjusted, although I think it is changAnd So when you put it altogether there’s no doubt housing in the big cities has become more expensive.
‘There are a limited number of options if you’re priced out of housing in the cities. Either stay at home with mum and dad, rent, or move to a cheaper location – and all three options are being used.’
Property Industry Ireland director David Duffy told the Mail: ‘What we’re seeing is affordability concerns and availability, which is causing people to move further away from the city.
‘The strong growth in those areas is consistent with what
‘Clear logjam by building houses’
we’ve been seeing over the past number of months. We’re seeing the growth move out and it’s partly demand and people seeing availability in those areas that they’re not seeing in the urban centre.’
KBC bank chief economist Austin Hughes said: ‘It’s the spread of the recovery. People are being forced to commute by affordability. The rate of increase in prices we are seeing just puts it out of people’s reach and, secondly, the constraint on people’s borrowing imposed by the Central Bank. the third element is the availability; there just isn’t the range of properties available. What you have now is a group of people who postponed purchases for the last five or six years, all trying to buy now, when there is no supply.
‘Until you clear the logjam you are looking at people spending longer in their cars. And you clear the logjam by building more houses, better roads, better infrastructure, better working practices.’
Despite the strong growth, Dublin residential property prices are almost 24% lower than their peak in February 2007, while residential property prices in the rest of the country are 28% lower than their height in May 2007.
From the bottom of the slump in 2013, prices nationally have increased by 73%. Dublin residential property prices have increased almost 90% from their February 2012 low, and residential prices in the rest of the Republic are almost two-thirds higher than the trough in May 2013.
Meanwhile, the Irish Council for Social Housing yesterday welcomed a report by the Department of Housing which recommends ‘strategic management of State lands with an appropriate tenure mix’ for social housing. christian.mccashin@dailymail.ie