First-time buyers, encouraged by the easing of the Central Bank’s restrictions on mortgage deposit lending, will drive a rise of 7% in house prices in Louth throughout 2017, estate agents have predicted.
A survey carried out by the Real Estate Alliance Group has shown agents expect prices in the county to continue to rise after the 14.7%% growth experienced in 2016.
This comes as the REA Average House Price Survey revealed that prices in Dundalk had increased by 32% or €40,000 over the past year – with the average three-bed semi now costing €165,000.
The equivalent house cost €125,000 in December 2015, with the low supply of property in the town fuelling rises amongst those wanting to get themselves on the housing ladder.
In Drogheda, the average house price now stands at €205,000, up 3.8% (€7,500) on the year, with the market behaving along the lines of similar towns in commuter counties whose prices are above €200,000 and the Central bank restrictions and income multipliers come more into play.
“Downsizers are competing with first-time buyers for older properties in Drogheda due to lack of new homes supply,” said Darina Collins of REA O’Brien Collins in Drogheda.
The survey found that agents expect prices nationally to rise by 6.1% over the next year – with Dublin predicted to grow by 6.8% over the next 12 months.
Agents in the three main cities outside Dublin are optimistic about 2017, with rises of 10% predicted in Limerick and Galway, with Cork looking at a more modest 5% increase with agents in the latter two areas highlighting a lack of new developments planned for the cities.
The outlook for the commuter areas surrounding the capital is quite cautious, with counties around Dublin predicting a rise of 3.8% on average and many agents fearing that the market has hit its height under the current financial regime.
The average semi-detached house nationally now costs €202,926, the Q4 REA Average House Price Survey has found – a rise of 1.4% on the Q3 figure of €200,148.
The biggest percentage increases over the past year came in the country’s smaller rural towns situated outside of Dublin, the commuter belt and the major cities.
Prices here rose by an average of 12.3% over the year, with a three-bed semi now costing €134,290 – an increase of 2.4% in the past three months.
“The announcement of the easing of the Central Bank restrictions has given the market great short-term hope, but the real problem in the property lies in supply,” said REA chairman Eamonn Spratt.
“We are bringing people into the market, but we have no long-term plan to provide the suitable housing that they need around the country.
“The fact remains that builders will not create developments unless those properties can be sold for more than €200,000.
“Until that point, unless there is state intervention on supply financing, we will not see sustainable building in areas where the average is below that point.
“It is this realisation that is causing price inflation in towns around the country, with the highest rises of all – an average of 7.4% – being predicted for the sector outside of Dublin, the commuter areas and the major cities.
Available for interview:
Darina Collins, REA O’Brien Collins, Drogheda, 086 3847542
Michael Gunne, REA Gunne Property, Dundalk, 086 389 0009