Prices will continue to rise until supply interventions introduced

IPAV CEO, Pat Davitt. Photo: Creative Photography

IPAV CEO, Pat Davitt. Photo: Creative Photography

Property prices will continue to rise unless more dramatic interventions on the supply side are implemented, according to the Institute of Professional Auctioneers & Valuers (IPAV ).

Pat Davitt, IPAV chief executive, says that while there are a whole series of different markets within the Dublin region, there is evidence of a slowing in the rate of growth there. This is happening while regions outside Dublin are picking up, the association says.

“There simply hasn’t been enough emphasis directly on the key problem of supply,” Mr Davitt said. “Minister Coveney’s recent decision to release 2,000 hectares of land controlled by city and county councils to provide at least 50,000 new homes is a very positive intervention. But we need to see more of this type of initiative.”

Mr Davitt said another supply issue is the cost of building residential properties and the cost of finance.

“Where is the analysis of building input costs promised in ‘Rebuilding Ireland’, the Government’s housing strategy?” he asked.

The IPAV has, for some time, urged the Government to set up a special price-controlled Builders Fund with interest rates akin to those of the special hardship cashflow loan scheme for farmers of just 2.9 per cent across six years through the Strategic Banking Corporation of Ireland.

Such an initiative would mean the end price of housing to the home buyer would be contained by the Government and there would be no loss to the Exchequer as monies would be repaid as homes are sold, it says.

Mr Davitt said that increasingly, analyses of the market are pointing to the ineffectiveness of market controls and predicted a steady flow of small landlords from the market.

“Rent controls and unequal tax treatment in comparison to commercial landlords are making the situation worse and as time passes this will emerge more strongly in the figures,” he concluded.

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