A report from MyHome.ie in association with Davy shows that house prices in Offaly continue to surge with the price of 3 and 4 beds in the county up 2.4% and 2.8% respectively in quarter 2 of the year.
The mix-adjusted price on newly listed properties nationally rose by 5% in the second quarter of the year and are up 8.9%. In Dublin prices rose by 2.8% and are up 10.3% year on year. Newly listed properties are seen as the most reliable indicator of future price movements.
Quarter 2 witnessed a strong pick up in the prices of 3 and 4 bed semis around the country and this was clearly evident in Offaly. The median asking price of a 3 bed semi-detached property in the county was up by 2.4% in the quarter to €130,000 – an increase of €3,000. Annually prices were up 10.6% and now stand at their highest level since Q4 2012.
The asking price of a 4 bed semi-detached house in the county increased by 2.88% to €177K – an increase of just under €5,000. This contributed to an annual increase of 5.5% with prices for this house type in Offaly now at their highest level in exactly six years since Q2 of 2011.
The author of the report, Conall MacCoille, Chief Economist at Davy, said house price inflation should remain strong despite the likely abolition of the ‘Help-to-Buy’ scheme in the upcoming Budget. While acknowledging that 5% was another sharp increase he pointed out that prices do tend to fall back after the busy summer."
“The outlook for Irish house price inflation will be primarily driven by robust jobs growth, rising incomes and competition among homebuyers, leading to more highly leveraged mortgage lending. The likely demise of ‘Help-to-Buy’ could lead to a rush of transactions in 2017 as first-time buyers move quickly to avail of the scheme and to a slowdown in 2018 as it is phased out. Nonetheless, the bigger picture is that Irish house price inflation should remain robust, driven by the recovering economy,” he continued.
MacCoille believes that ‘Help-to-Buy’ has had a significant impact on the housing market.
“The 1,679 ‘Help-to-Buy’ claims approved to date have cost €24.5m. This means that the average ‘Help-to-Buy’ cash rebate has equalled €15,000, or 5% of a €300K newly built home. Given the 7,275 applications received so far, the initial estimate that the scheme would cost €50m may now seem conservative," he said.
“Did ‘Help-to-Buy’ contribute to house price inflation? What evidence there is suggests it did, as the price of newly built homes is rising much faster than existing dwellings. Of course we have also seen a pickup in lending – in Q1 the average mortgage loan to first time buyers rose by 9.5% to €194K – and this must in part reflect the relaxation by the Central Bank of mortgage lending rules late last year."
The Managing Director of MyHome.ie Angela Keegan said the continuing tightness of the housing supply situation means houses are being snapped up ever more quickly by desperate buyers and that competition for properties will intensify through 2017.
“There were only 21,000 homes listed for sale on MyHome in Q2, down over 11% on the year. This means that just 1% of Ireland’s housing stock of two million homes is currently listed for sale. In Dublin where demand is greatest, fewer than 4,000 homes or 0.85% of the capital’s stock is listed for sale," she commented.
“Not surprisingly average time to sale agreed for homes has fallen to 3.8 months nationally and just 2.7 months in Dublin. These are the lowest times we’ve seen since we began recording these figures in 2011.”
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