Commenting on the most recent CSO Residential Property Price Index for July IPAV, the Institute of Professional Auctioneers and Valuers, said the rising prices mirror those of IPAV’s own Property Price Barometer and are likely to continue until supply improves.
Pat Davitt, IPAV Chief Executive said prices outside the capital are growing faster but many of those areas did not see the growth levels of urban areas.
“Markets like Longford, Cavan, Kerry and Mayo are now catching up in terms of price growth and accounting for some if not all of the stronger increases. Outside of the Greater Dublin Area prices in general are still over 13percent behind the 2007 peak," Mr Davitt stated.
He said with regard to increasing the supply of homes the Government’s new Housing for All plan along with measures in next month’s Budget will be critical.
“We need to see the cost of building homes reduced, to make them more affordable. In this regard we believe there should be a reduction in the VAT rate on new housing from 13.5 percent to five percent for owner-occupiers.
“Forcing new home buyers to borrow to pay an upfront VAT bill to Government and to pay interest charges on that borrowed money over the lifetime of the mortgage does not seem fair or sensible. It does not apply in Northern Ireland or the UK.
“However, some accompanying measures would need to be introduced to ensure that the saving in the cost of delivery is passed on to the owner-occupier purchaser, and is not used to enhance developer margins,” he said.
And he said a realistic strategy to bring about 100,000 vacant properties and business premises into the housing stock, was essential, including tax incentives.
He said issues with planning, taxation, the supply of services are delaying the delivery of housing and increasing the cost of delivery. There needs to be a fundamental re-appraisal of these issues to address the supply side problems in the market.
