Prices to rise for three more years

IRISH property prices are heading for a “soft landing” but the cost of buying a home will keep rising for at least another three years, it was claimed yesterday.

A new report has predicted house prices are set to grow at a “rapid” 9.5% this year and 8% in 2019 as the supply begins to catch up with demand.

The study by S&P Global Ratings revealed prices were up by 12% in June compared to that month last year with the strength of the economy a key driver.

But because of the continuing shortage of property coming on the market S&P predicted ongoing supply shortages will continue to be a factor pushing price rises.

The report points to what it describes as capacity problems in terms of people and investment holding back delivering more homes even though the construction is enjoying a major recovery.

It states: “But this comes from such low levels even if house completions were to continue to grow at their extraordinarily strong current rates – of 30% annually in the first half of this year or an annualised 7,950 units. It would still take until early 2021 for supply to meet demand estimated at 35,000 units per year.” It added as the supply improves, excessive pressure on house prices should gradually ease.

units per year must be built to meet demand