Half of us fear house prices will rise in ’21

HALF of us expect house prices will start to go up again next year, a major survey released today has found.

A combination of a slowdown in building work on new homes caused by the pandemic’s shutdowns, strong demand and rising builders’ costs are pushing up prices.

The roll- out of Covid vaccines from this week also means viewings and building work should return to normal in the next few months.

The latest official 12-monthly figures show property prices dipped slightly by just over €5,000 to an average of €294,247

‘Cost pressures are picking up’

now, which i s down f rom €299,539 a year earlier.

But the latest Bank of Ireland Economic Pulse – which is part of an EU-wide survey that includes 1,000 households and 2,000 businesses in Ireland – shows ‘firmer readings in all regions’ and ‘one-in-two t hinks house prices will increase in the coming year’.

‘Having risen for an eighth consecutive month in December, the Housing Pulse has almost returned to its prepandemic level,’ it says.

Auctioneers have al s o reported a boom in sales in October and November.

The Economic Pulse report added: ‘Housing demand has held up relatively well in the face of the Covid-19 shock and while the hit to supply has also been less than feared, the number of new homes coming on stream remains shy of what is needed.

‘Cost pressures are picking up too, with over half of builders reporting an increase in non-labour input costs in the past three months.’

The positive outlook sentiment contrasts with the latest CSO f i gures which show actual sale prices have not risen since May when they were up by just 0.4%.

In June they were stagnant, in July they fell 0.7%, in August by 0.9%, by 0.8% in September and the latest figures for October show a 0.4% dip.

Housing campaigner David Hall, of the Irish Mortgage Holders Organisation said: ‘It’s no surprise people expect prices to rise, there’s been low production so no supply increase and also people have had a chance to save during the pandemic.

‘A lot of people who were renting have moved home so all the indicators are for house prices to go up. It’s not surprising, in fact I’m surprised i t’s not two- out- of- two. I would expect it to be higher.

‘Now the vaccine is here, and unless production starts immediately, and it’s going to be a number of months, that is why prices will go up. I’ve spoken to auctioneers and they said October and November were the busiest two months since 2008 for people buying.’

October saw the highest number of monthly sales so far this year at 3,845, although it’s down from 4,428 last year.

However, official figures have not yet been released for November and December.

Bank of Ireland chief economist Dr Loretta O’Sullivan said: ‘The December Economic Pulse benefited from the reopening of the economy at the start of the month. Consumer and business sentiment both tracked higher as households and firms geared up for the festive season.

‘But with virus cases on the rise again and the Government announcing another round of restrictions in recent days, the mood heading into the New Year will likely sour.’

‘People saved in pandemic’