Commenting on the CSO Residential Property Price Index showing a slowing of house price inflation, IPAV, the Institute of Professional Auctioneers & Valuers, said the figures indicate that market forces are working, despite the shortage of homes.
Pat Davitt Chief Executive of IPAV said the index is broadly in line with IPAV’s recent Property Price Barometer which captures actual prices achieved by auctioneers in the first six months of the year for the three bestselling property types - three and four-bed semis and two-bed apartments.
“While there are markets within markets where prices can vary within small geographical areas, such is the nature of house prices, nonetheless, the trend towards an overall tapering of the rate of growth is a signal that market forces are working, despite the shortage of homes,” he said.
Pointing to CSO figures which show that of the 4,104 dwelling purchases filed with the Revenue Commissioners in July only one in five was for a new dwelling, he said, “this is where the real problem is, there are simply not enough new dwellings available for purchase. While the volume of new dwellings increased by just over 30 percent on the previous year, it is not enough to meet demand, and it’s coming from a very low base.”
He said he expected that the current trend is likely to continue for the foreseeable future.
“While apartments for rent are needed, we must be careful to balance it with homes for purchase at affordable prices for those who want to plan their long term lives in Ireland.
“Home ownership is crucially important to the financial health of individuals and families. Policy makers need to get SME builders building, and doing so rapidly,” Mr. Davitt noted.
He concluded by saying that it was regrettable the €750m low interest loan scheme for builders announced in last year’s budget had not yet come on stream.