Boom-level house prices force fam­i­lies into long com­mutes

Irish Independent - - News - Char­lie We­ston

FAM­I­LIES are be­ing forced to buy homes miles from their work­place, as surg­ing house prices mean the mis­takes of the Celtic Tiger are be­ing re­peated.

A new sur­vey shows fam­i­lies will­ing to com­mute 30km to work, while the cost of prop­erty is the big­gest chal­lenge for young buy­ers.

The sur­vey re­sults emerged as new fig­ures from the Cen­tral Sta­tis­tics Of­fice (CSO) show no slow-down in the rate of prop­erty price rises. Prices were up 12.3pc in the year to De­cem­ber, a faster rate of rise than the pre­vi­ous months.

Ex­perts said the rag­ing rises and strict Cen­tral Bank lend­ing rules were putting homes out of the reach of fam­i­lies in the cap­i­tal and other large ur­ban ar­eas.

Out­side the cap­i­tal, prices are ris­ing at an even stronger rate, but are com­ing off a lower base.

They shot up by 13.3pc in ar­eas away from Dublin last year, ac­cord­ing to the fig­ures.

The av­er­age price of a prop­erty na­tion­wide is now €281,000, with Dublin prices av­er­ag­ing €427,000.

This means Dublin buy­ers are pay­ing a pre­mium of €146,000. Over the last year, the av­er­age price in Dublin has gone up by €20,000.

Prices are now av­er­ag­ing close to €600,000 in Dún Laoghaire-Rath­down, the most ex­pen­sive lo­cal author­ity in the State, the CSO said.

Prices across Dublin, at €427,000, are now back at the lev­els recorded in De­cem­ber 2006 by the now de­funct Per­ma­nent TSB/ESRI in­dex. This was the height of the boom.

But the CSO, which uses a dif­fer­ent method­ol­ogy, said yes­ter­day Dublin res­i­den­tial prop­erty prices were still 24.4pc lower than their peak in 2007.

Prices in the rest of Ire­land are 28.4pc lower than their 2007 peak, the CSO said.

In sep­a­rate re­search, it emerged that more than one in four new buy­ers is pre­pared to com­mute more than 30km from home to work.

The sur­vey, com­mis­sioned by Bank of Ire­land, also found that the cost of prop­erty is the sin­gle big­gest chal­lenge high­lighted by first-time buy­ers, with 53pc cit­ing this as their largest is­sue.

Bank of Ire­land head of mort­gages Shane Quin­lan said: “Hous­ing sup­ply and pric­ing is­sues are clearly driv­ing in­ter­est away from Dublin, with more first-time buy­ers pre­pared to travel longer dis­tances.” How­ever, the CSO fig­ures show that price rises in the re­gions are ris­ing rapidly, although they have taken longer to come off their lows. The west re­gion showed the great­est price growth, with house prices in­creas­ing 16.4pc, which has pushed up the price to €182,000, a rise of €12,000.

The south-east re­gion showed the least price growth, with house prices in­creas­ing 11pc. Apart­ment prices in the rest of Ire­land in­creased 15pc in the same pe­riod. Econ­o­mist with Mer­rion Cap­i­tal stock­bro­kers Alan McQuaid (inset) said prices would con­tinue to rise at a dou­ble-digit rate this year.

The tight­en­ing of Cen­tral Bank rules for sec­ond-time buy­ers will keep prices high in the cap­i­tal as it will mean fewer trans­ac­tions, he said.

“Dublin prices will be out of reach for more bor­row­ers as a re­sult, while in other ar­eas where buy­ers will not need to bor­row as much, prices will see stronger growth.”

Bro­kers Ire­land said the price surge meant the squeezed mid­dle were left with a Hob­son’s choice of ex­ces­sive rents or com­pet­ing with better-off peo­ple for limited hous­ing sup­ply.

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