A survey by The Society of Chartered Surveyors Ireland (SCSI) has found that 90 pc of 189 estate agents surveyed in December 2021 expect property prices to increase this year.
This could range from a 5 pc advance in Dublin, Leinster and Munster to a 7 pc increase in Connacht and Ulster. This was attributed to property supply shortages, pent-up demand and pandemic savings which all continued to drive activity.
The estate agents found that the most significant factor affecting house price increases was “the lack of supply of new housing to the market to meet growing demand”.
The majority (80 pc) of agents who expect prices to rise believe this is due to market factors – fundamentally the lack of supply of new and existing homes, while 13 pc attributed it to economic factors. Only 4 pc believe the Central Bank’s macroprudential rules are the key driver.
Nationally, property prices rose by 14 pc between January and October in 2021, compared to just 0.3 pc in the same period the previous year.
SCSI president TJ Cronin comments that “Twenty-twenty-one was the year when the lack of supply and Covid combined to totally distort the property market, pushing up demand and inhibiting the supply of new homes,”
SCSI agents said they expected growth in annual housing output to resume in 2022 “having been relatively stagnant in 2020 and 2021 at approximately 21,000 completions per year”.
With residential property completions only due to hit the 30,000 mark in 2023, the SCSI said it estimated the state needs to be building 40,000 units per annum to meet demand.
Critical to increasing supply was a more efficient planning system, Cronin said.
It is expected that growth in annual housing output will resume in 2022 “having been relatively stagnant in 2020 and 2021 at approximately 21,000 completions per year”, according to Cronin.
The report also illustrated a trend towards buying new homes linked to the rising cost of renovation, and driven by construction inflation. The exodus of small-scale landlords from the market was evident, which is thought to be linked to the complex set of rental regulations.
LSL News.