Shortage of property driving house prices

Sherry FitzGerald hosted a lunch briefing on the housing market in the Meyrick Hotel, Eyre Square, last week. The speakers at the briefing were Mark FitzGerald, executive chairman, Marian Finnegan, chief economist, Tony Kavanagh, director Sherry FitzGerald Ltd, and Michael Grehan, MD Sherry FitzGerald Ltd.

The event was attended by some 85 guests from the property and financial sectors. The theme of the briefing was the shortage of property available for sale and the upward pressure this was placing on property values, specifically in the regional centres most notably in Galway, Cork, and Dublin.

Opening the event Mark FitzGerald suggested that Ireland was in need of a national property strategy to align the needs of a growing population with the needs of a competitive economy.

Michael Grehan noted: “Sherry FitzGerald in Galway had approximately 980 people registered to buy in the Galway market.” This contrasted sharply with statistics on the stock of property available for sale provided by Marian Finnegan, who said there were only 282 properties available for sale in Galway, which equates to only 0.6 per cent of the private housing stock. “The combination of the emerging strength of demand and this significant shortage of available product fuelled price growth in Galway city of 13 per cent in 2013,” Ms Finnegan said.

Looking at the market overall, Ms Finnegan noted that there was only 37,990 units currently advertised for sale in Ireland, a figure that represented 2.1 per cent of the country’s private housing stock. This contrasts to a total sales figure of 28, 861 units in 2013, an indicator an emerging shortage of property in much of the rest of the country. A normal functioning housing market should have approximately two years’ supply available at any one time, anything less than this has the potential to fuel house price inflation.

Tony Kavanagh spoke about the new homes sector. However he expressed concerns about the industry’s ability to meet the market requirements because of a variety of factors, not least the mismatch between market needs and current planning permissions, freeing up of development land and penalising development contributions.

It would seem that for the larger regional centres, most particularly Dublin, Cork, and Galway, the property recession appears to be over. However there is no doubt the challenge of the shortage of

available property to rent or to buy will exercise the minds of all those in the industry in the months ahead.

 

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