Source: Sam Boal, The Times UK
Property prices grew by 8.4 per cent in the last year, the lowest rate of growth in two years. The latest data from the showed that prices have risen by 6.3 per cent in Dublin, and 10.6 per cent outside the capital.
The region with the largest price growth was the midwest, where house and apartment prices jumped by 21.5 per cent. Irish property prices have risen by 83.8 per cent from a low in early 2013, and Dublin prices have risen by 98 per cent since February 2012.
Residential property prices in the rest of the country are 77.9 per cent higher than at in May 2013, their lowest level since the economic crash.
Eamon Hetherington, director at GPD, a property development company, said the figures showed that the delivery of housing was not yet offsetting the increase in prices. “The price of land is still too expensive,” he said.
“The cost of providing essential services to sites, coupled with increasing material and labour costs, continue to drive up the price of the much sought after and much needed family home.
“We now need a sustained approach, starting with the overhauling and improvement of procurement routes, coupled with a detailed understanding of government’s plans for building in Ireland, so that the industry can plan ahead. Ireland’s construction industry needs to innovate and embrace the lean, as well as modulations and off-site manufacturing, to become smarter and, ultimately, achieve more for less. Everyone has a role to play in fixing our broken housing market.”
He also said that the skills shortage in the construction sector also needed to be addressed.
The Economic and Social Research Institute has warned that the Republic will need an influx of foreign workers to meet its housing targets. It also cautioned that the shortage could, in the short term, add to rental pressures and housing demand.
The ESRI has also said that about 25,000 new homes will be built next year. The number of new homes built this year is expected to be about 19,000, but demand is closer to 30,000.
The mismatch between supply and demand has caused the average rent in Dublin to soar to nearly €1,600 a month, €500 higher than the average in 2008.
Conor O’Toole, a senior research officer at the ESRI, said he expected about 18,500 houses to be completed this year, with 25,000 next year.
Although such a number of completions would be a significant increase in housebuilding, it is still far below what is needed.
The ESRI has previously said that reaching the 30,000 figure required would not completely address the supply issue because the number of homes completed was extremely low for years after the financial crash. “We are getting closer, but there is still also a backlog as we haven’t done 25,000 units for a number of years even though we had the excess demand,” Dr O’Toole said. “There will still be continuing excess demand in the housing sector for a number of years even if we hit 25,000 units.”