Boom-level house prices force families into long commutes
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.