House Price Rises Unsurprising Given Pent- Up Demand – Brokers Ireland
Fri Mar 12 2021
Commenting on today’s CSO Residential Property Price Index for January, Brokers Ireland said the continuing rise in prices in the year to January, up 1.1pc in Dublin and 4 pc elsewhere is unsurprising given strong underlying demand and the lack of supply.
Rachel McGovern, Director of Financial Services at the organisation, which represents 1,225 broker firms, said: “Now that intending buyers believe that the pandemic is not resulting in a drop of prices that realisation would appear to be bringing a bit more intensity to the market.”
She said it remains to be seen how the market will shape up post the pandemic.
“It is likely that many would-be sellers are holding off until the market opens up. The first quarter of the year, given the closure of construction is likely to be slow but the back end of the year could see volumes rise considerably. How those factors will impact on price is difficult to say,” she said
Ms McGovern said that is not to underestimate the “seismic problem” of affordability and access to mortgage finance by would-be first-time buyers.
“The final shape of the Government’s Shared Equity Home Ownership scheme will be critically important in this regard,” she said.
With an overall median house price of €261,000 in the 12 months to January, a first-time buyer would need a household income of €67,114 based on the Central Bank income limit of 3.5 times income to be able to afford such a home, along with savings of at least €26,100 for a deposit.
Brokers Ireland has called for the 3.5 times income limit to be extended to 4.5 times with loan-to-value requirement set at 90pc for all, including second and subsequent buyers.
Ms McGovern said the building of new homes needs to be ramped up. “The need for greater supply has been identified for some time and the Central Bank estimates that need at 34,000 homes every year for a decade. Yet in 2020 just 20,676 new dwellings were built.”
Brokers Ireland has consistently maintained that home ownership acquired at an affordable price is the best way to grow personal wealth over the longer term.
Further information: Rachel McGovern, Director of Financial Services, Brokers Ireland Tel. 086-8259938
Mairéad Foley, Foley Ryan Communications Tel. 086-2556764