Commenting on the CSO Residential Property Price Index for February, Brokers Ireland has stated that a further rise in property prices, this time a jump from 2.6 percent to three percent between January and February, reflects the strong demand amid decreasing supply – the latter down eight percent month-on-month in February.
“With large numbers of people chasing too few properties, it is worrying in terms of prices for the remainder of the year.
“However, one would hope that as the economy opens up further with the vaccine programme underway, there would be something of a pent-up supply released onto the market, but we simply don’t know at this stage what the scale of that will be.
“Many would-be sellers have been holding off putting their properties on the market, and no doubt some builders are also holding off on putting properties on the market, especially with the severe pandemic restrictions on showing properties,” Rachel McGovern, director of financial services at the organisation, which represents 1,225 Broker firms, said.
Ms McGovern said lenders are likely to remain risk averse, having become more so than ever during the pandemic - and that will impact the availability of mortgage finance for certain cohorts.
“On the other hand, the Help-to-Buy scheme is due to finish at the end of this year and it will likely create something of a rush in the final months of the year.
“The bottom line is that the supply of new properties must be increased. Unfortunately though there is little evidence so far that anything different is being done to ensure supply is ramped up.
“It doesn’t engender confidence to see various arms of the State squabbling among each other about the costs of building at this very advanced stage, in what some time ago, was deemed a housing crisis.
“The Central Bank estimates that 34,000 new homes are needed every year for a decade, yet in 2020, just 20,676 new dwellings were built.
“That the latest debate is about whether or not house buyers should hold off on buying homes for two years to allow prices to stabilise, is tragic.
“We would always encourage home ownership once one can afford to buy a home. It is so critical to the growth of personal wealth over the longer term,” she concluded.
