Commenting on the recent CSO Residential Property Price Index for November, IPAV, the Institute of Professional Auctioneers & Valuers, said the slowing rate of increase in prices is in line with what auctioneers throughout the country are reporting.
“There are geographical variations, some of a magnitude not seen before and arising from new working norms.
“While the West generally is showing a rise of 15.6pc, it should be remembered that this figure is coming from a low base price. The index is showing the median price of €125,000 for the Ballyhaunis area, a price at which it would be unviable to build a new home,” Pat Davitt, IPAV Chief Executive, said.
Mr Davitt said overall the figures point to a stabilisation in prices for the first quarter of this year at least.
He said the numbers of sales this year is likely to be back to 2019 levels when 45,276 purchases were filed with Revenue, adding that auctioneers are reporting two in every four properties being sold are accounted for by private non-institutional landlords leaving the market, arising from the constantly changing and very challenging regulatory and taxation environment that treats private landlords very differently from institutional landlords.
Mr Davitt said areas in which the price of homes is below the cost of building them will not attract new builds while this situation maintains.
“Increasing interest rates and very high levels of inflation in building costs are also impacting. So, new measures being promised by the Government are eagerly awaited. And the nature of these will dictate whether or not we move forward in terms of improving property supply and affordability. Maintaining the existing situation will, in effect, amount to a worsening of the housing crisis,” he warned.
IPAV has called for mortgage terms to be extended for periods of up to 40 and 50 years to address the current situation where home ownership has effectively, become the almost exclusive preserve of those on higher incomes.
Strong Demand Continues to Drive Land Price Increases
Meanwhile, a new report on land prices from IPAV has found continuing price growth both for purchasing and leasing during 2022.
Some areas are now achieving as much as €25,000 an acre, while others are as low as €7,000. Prices are now averaging €12,231 an acre, up from €8,750 when the report began in 2016.
Land leasing, which has experienced unprecedented demand, has seen prices rise to as much as €500 an acre in some areas during 2022.
“While farming sees new challenges each year, be it those arising from Brexit, climate change or political volatility, it’s an incredibly resilient sector and has shown itself to be very adaptable.
“This year changes taking place in the Common Agricultural Policy, in particular the non-clawback on Single Premiums, will be eagerly watched to see what impact it will have on prices,” Pat Davitt, IPAV’s Chief Executive, said.
He said the new Residential Zoned Land Tax (RZLT ) is causing considerable worry for farmers with zoned land that is used for agricultural purposes.
“While we have serious reservations about this tax achieving its desired aim of incentivising the sale of land to someone who will develop homes in a timely manner, we would like to see a commitment by the Minister for Agriculture to exclude farmland from the scope of this new tax,” he added.
With regard to the methodology for valuing land Mr Davitt welcomed the return to European Valuation Standards (EVS ), something IPAV has championed for some time.
“This is a very welcome development. It brings the highest standard of rigour to the land valuation process. And it has the benefit of a European wide experience. The standards are regularly reviewed, tested and updated,” he remarked.
He concluded by thanking IPAV members who helped compile the data for the latest Farming Report, along with report editor, Philip Farrell.
