Growth may have slowed but buy­ers can’t af­ford to buy

The Irish Times - Thursday - Property - - Front Page -

This was the year when the Cen­tral Bank of Ire­land’s mort­gage-lend­ing rules re­ally kicked in – and boy did they. Most mar­ket ob­servers last year pre­dicted price growth of be­tween 9 and 11 per cent in 2018. That fig­ure is more likely to come in at around 5 per cent – def­i­nitely a sharper-than-ex­pected cool­ing off. This has gen­er­ally been greeted as a good thing. Why, then, does it not feel like it?

Af­ford­abil­ity has be­come a huge is­sue, par­tic­u­larly for buy­ers on lower in­comes or who bor­rowed heav­ily dur­ing the last credit bub­ble. The Cen­tral Bank’s mort­gage cap of three and a half times bor­row­ers’ in­come is in­ad­e­quate as long as wage in­fla­tion dra­mat­i­cally lags prop­erty-price rises. A cou­ple earn­ing the av­er­age wage of ¤40,000 each can ex­pect to bor­row just ¤280,000, which pretty much rules out most prop­er­ties in Dublin.

The Cen­tral Bank has de­clared it­self happy with its lend­ing re­stric­tions’ im­pact on prices, and although it ac­knowl­edges that a hous­ing mar­ket in bal­ance does not nec­es­sar­ily trans­late into a mar­ket that is af­ford­able for most, it has cer­tainly made it clear it will not be ad­just­ing rules any time soon.

The so­lu­tion will there­fore have to come on the sup­ply side. The Govern­ment will feel it tack­led this hoary chest­nut head on in Oc­to­ber, when, be­fore the bud­get, it launched the Land Devel­op­ment Agency, with its man­date to de­liver 150,000 homes over 20 years on tracts of State-owned land. But with the first of these homes not due be­fore 2020, the ur­gency will in all like­li­hood have gone from the hous­ing cri­sis by that time.

These homes will be built in part­ner­ship with pri­vate de­vel­op­ers, who will clearly en­gage only if the profit mo­tive adds up. It re­ally seems to have been a big win for de­vel­op­ers faced with pro­hib­i­tive land prices in the cap­i­tal. The re­lease of lands at af­ford­able prices in these ar­eas will be a boon for them, but whether this will trans­late into more af­ford­able new homes has yet to be seen.

Cost con­straints are al­ready very ev­i­dent in the new-homes sec­tor, from both a sup­ply and a de­mand per­spec­tive. It was ex­pected that 2018 would be the year when the new-homes trickle would turn to a flow, but this has not ma­te­ri­alised de­spite con­stant re­ports that we need 35,000 new homes a year. In re­al­ity about 17,000 new

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its lend­ing

Dowd­stown House, Maynooth, Co Kil­dare ¤3.4mPark Av­enue, Sandy­mount, Dublin 4. ¤4.5m (off mar­ket) COUN­TRY 1. Dowd­stown House, Maynooth, Co. Kil­dare ¤3.4m, Sherry FitzGer­ald Coun­try Homes 2. Galtrim House, Dun­sany, Co Meath ¤3m Sav­ills 3. Ath­gar­van House, Ath­gar­van, Co Kil­dare ¤2m, Sherry FitzGer­ald Coun­try Homes 4. The Beach Haus, Bet­tys­town, Co Meath ¤1.525m, Sav­ills 5. Scilly House, Scilly, Kin­sale, Co Cork ¤1.5m En­gle & Volk­ers

41 Cow­per Road, Rath­mines, Dublin 6 ¤4.7m DUBLIN 1. Clon­more, 15A Ailes­bury Road, Dublin 4. ¤8.1m, Lis­ney 2. Lota, 26 Coliemore Rd, Dalkey, Dublin. ¤7.5m, Sherry FitzGer­ald 3. Ard­more, 34 Ailes­bury Road, Balls­bridge, Dublin 4. ¤4.875m Sherry FitzGer­ald 4.41 Cow­per Road, Rath­mines, Dublin 6. ¤4.7m Sherry FitzGer­ald 5.81

34 Ailes­bury Road, Dublin 4 ¤4.875m

Clon­more, 15A Ailes­bury Road, Dublin 4 ¤8.1m

The Beach Haus, Bet­tys­town, Co Meath ¤1.525m

Lota, 26 Coliemore Rd, Dalkey, Co Dublin ¤7.5m

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