Why have house prices hit the roof?
MEASURES JUST MAKE MATTERS EVEN WORSE
IT’S hard to believe it could happen again — but house prices are soaring across Ireland at such a rate that it would make the Celtic Tiger wince.
The rise in house prices has been so dramatic that the increases are now almost three times higher than the rate of inflation.
Shocking new CSO figures show house prices increased by almost 11 per cent nationwide in the year to August.
And it’s not just a Dublin phenomenon. House prices are actually rising faster outside of the capital — with homes in other parts of the country up by 11.5 per cent, compared to 10.2 per cent in Dublin.
Senior CSO Statistician Barra Casey, said the latest figures represent the largest annual rise in prices since June 2018.
The average house price is now almost €24,000 higher than a year ago.
In the cities, the average price of a property in Dublin is now € 399,323, while the average in Cork is € 307,464 – up 5.8 per cent.
In Galway, the average cost of a property is now € 316,060, while in L ime r ick it ’ s €230,585, and in Waterford the average price now stands at €204,759.
Rachel McGovern, director of financial services at Brokers Ireland, said it is worrying that prices are accelerating into double- digit growth and long-standing supply and affordability issues remain.
Meanwhile, the Social Democrats Housing spokesman Cian O’Callaghan has accused the Government of “pouring petrol on the fire” of an already red-hot property market.
Alarm
Deputy O’Callaghan said: “House prices have increased by more than 10 per cent in a year. These figures should be setting off alarm bells in the Customs House.
“House price increases are now almost three times higher than the rate of inflation. This is utterly unsustainable.
“What is the Government going to do to control soaring costs?
“It’s only bi g idea, to solve the housing crisis, is topourpetrolon the fire of an already red-hot property market, through th eir proposed shared equity scheme.
“Why do they do this? Because the construction industry tel ls them it’s a good idea — and, they are not the ones being engulfed by the flames.
“Schemes like the ‘ help to buy’ scheme and the ‘shared equity’ scheme will not increase the supply of affordable homes – they will ratchet- up prices to ever increasing unsustainable levels.”
Following the latest CSO data, mortgage experts have warned values are increasing a lot more than the averages quoted in the report.
Joey Sheahan, head of credit at MyMortgages. ie, said new builds and coastal properties, in particular, are continuing to soar.
“We are seeing a huge number of buyers buying off plans, with whole developments being sold before they are built,” he said.
Trevor Grant, chairperson of the Association of Irish Mortgage Advisors, said the acceleration in property price growth cannot be ignored but hoped prices might stabilise with the resumption of construction.
“With construction sites back up and running following more than a year of stop start production, we would hope to see an increased supply of new homes coming on stream in the near future which should help stabilise prices,” Mr Grant said.
“That said, there are still too many developments caught in planning limbo and that is something that requires urgent action by Government.”
Stream
Meanwhi le, Labour housing spokesperson Rebecca Moynihan said that the Government’s Housing For All plan will not bring the supply of homes desperately needed on stream.
She said: “The Housing for All plan and Budget proposals exemplify a developer, investor led approach allowing for this almost 11 per cent price growth.
“The Minister has failed to grasp the nettle and tackle the housing crisis through the delivery of State led social and affordable homes.
“Instead, the Budget housing proposals showed more of the same tired efforts to incentivise the private market rather than the state led action needed to address the last five wasted years.”