herald

Wednesday 21 August 2019

Cash buys down as experts predict 5pc jump in home prices

MORTGAGE lending has improved, leading to a reduction from 50pc to 35pc in cash purchases, a report has indicated.

Overall, housing activity levels have increased, the Society of Chartered Surveyors Ireland's (SCSI) report has found.

The report also highlighted a rising confidence in the property market, with the rate of investor transactions now at 22pc - but house prices will continue to rise within the next year, those surveyed believe.

The SCSI's first housing market report is based on a survey of property professionals.

Some 90pc believe average house prices will be higher in 12 months' time, with one-in-three saying they will rise by 5pc.

A massive 97pc said prices in Dublin will rise over the same period, with one-in-four saying they will be 10pc higher.

First-time buyers accounted for 44pc of transactions and movers accounted for 29pc, an indication of an improvement in mobility due to properties lifting out of negative equity.

Simon Stokes, of the SCSI, said the increased sales activity levels, including enquiries and purchases, and the re-emergence of investors suggest confidence is returning.

But the lack of supply, especially in Dublin, remained a key issue, he warned. Data published by the SCSI for the first quarter of the year put the rate of cash purchases at 50pc.

DEMAND

"Ninety percent of respondents in Dublin believe there is a greater demand for housing than supply and 70pc believe that demand will continue to outstrip supply in Dublin in 12 months' time," Mr Stokes said.

"We urgently need more homes to be built. The society recently called for a number of measures to increase the supply of new homes including a builders' finance fund to help small building companies, a two-year reduction in VAT on new homes to 5pc and a reduction in development contributions," he added.

"These measures would go some way to alleviating the supply restrictions in the market and the worrying pace of property price increases.

"However, the situation in the west and mid-west is very different, with 60pc and 80pc, respectively, believing that supply is greater than demand and that is an issue which also needs to be addressed," Mr Stokes said.

comurphy@herald.ie

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