House prices at a faster rate than the peak of bubble
Property: House prices are rising at the fastest rate since the peak of the property bubble almost seven years ago.
A main cause is the limited availability of suitable housing in Dublin. This is where prices have risen by more than a fifth (22.4%) within the last year and 4.4% in the last month alone. This scarcity has driven up the price of the national average.There has been more than 10 per cent jump in the prices of residential property over the last year. This has fueled calls for more homes to be built, especially in the Capital, Dublin.
The (CSO) Central Statistics Office’s latest report reports that the average cost of buying a home nationwide rose 10.6% since May last year. This is the first time that prices have risen by double digits since the Recession Property Crash.
Onlookers have warned that cash-buying investors are still making up nearly half off all property purchases. This is causing stress on people seeking a home and who have been able to get a mortgage. Many believe that this could be worrying times for First Time Buyers by forcing them to jump at open opportunities if the rate continues to rise. This can put themselves in danger of over-stretching themselves to get on the property ladder with the possibility of interest rate hikes in the future.
The reason that cash buyers and investors are buying up the available property is due to rising rents, tax breaks, low interest rates and a renewed confidence in Ireland’s economic outlook, making property an attractive investment for those with money to spend.
The prices however in Dublin are still more than 44% lower than they were at their peak prices at the height on the boom in February 2007. Nationwide, prices are 47% lower.
A member of the Property Industry Ireland, Peter Stafford, who represents businesses working in the property and construction sector, said that something must be done to tackle the lack of supply in housing.
“It is likely that, as in previous years, around 8,500 new properties will be built this year, far below our annual need of 25,000,” he said.
“Until measures are put in place to improve the supply of new properties in areas where they are needed, prices will continue to rise.”
Mr Stafford warned the lack of suitable housing would reap social as well as economic consequences.
Have you any concerns about the current rates and the property market?
Are you a First Time Buyer?
Contact us at Keane Thompson if you are looking for some advice, we would be happy to help.