The Institute of Professional Auctioneers & Valuers (IPAV ) says Irish consumers can get used to the price of housing continuing to rise until supply increases.
The IPAV made the comments in response to the latest CSO report which showed a 7.3 per cent national increase in the cost of housing in comparison to September last year. This accounts for an increase of 5.4 per cent in Dublin and 11 per cent elsewhere.
Pat Davitt, the IPAV’s chief executive, said that while evidence remains to be gathered it would appear at this early stage that the Government’s Help-to-Buy scheme may be succeeding in giving some confidence to the market.
“The overly strict Central Bank mortgage lending rules have been hampering not just first-time buyers but overall confidence in the market, although there are still very stubborn cost issues impeding building,” he said.
He called on the Government to revise the new Help-to-Buy scheme for first-time buyers by extending it to include secondhand homes: “Such a move would enable first-time buyers to purchase homes in a wider range of areas, for example, closer to their families, rather than having to move to a more limited number of areas where new homes are being built,“ he said.
Mr Davitt added that it was notable in the recent CSO report that the highest increases are now happening in the Midlands: “The commuter belt is becoming very elastic as people are being priced out of Dublin,” he said. “As we saw in the recent Daft Rental Report, it is now substantially cheaper to buy than rent in most parts of the country, even factoring in a 2 per cent increase in interest rates.
“Extending the Help-to-Buy scheme would also facilitate greater movement in the property market, and ultimately this would be more effective in helping supply constraints and would have a positive knock-on impact along the line in alleviating the overall problem. Whether the Help-to-Buy scheme is extended to secondhand homes or not, prices will continue to increase until they reach the level at which new homes are selling, unless the Government does something to bring down new home prices.”