House price inflation should remain strong in 2017 despite the likely abolition of the ‘Help-to-Buy’ Scheme, according to the latest property report from MyHome.ie in association with Davy.
The mix-adjusted price on newly listed properties nationally rose by 5 per cent in the second quarter (Q2 ), up 8.9 per cent on the year. In Dublin prices rose by 2.8 per cent and are up 10.3 per cent year on year. Newly listed properties are seen as the most reliable indicator of future price movements.
The mix-adjusted asking price for new sales nationally is now €251,500, an increase of more than €24,000 in the last six months. The corresponding figure for Dublin is €360,000 - an increase of €32,000.
Q2 also witnessed a strong pick-up in the prices of three- and four-bed semis around the country and this was clearly evident in Westmeath. The median asking price of a three-bed semi-detached property in the county was up by 3 per cent in the quarter to €139,000 – an increase of €4,000.
Annually, prices were up 4.5 per cent and now stand at their highest level in exactly six years since Q2, 2011. The asking price of a four-bed semi-detached house in the county fell back slightly by 1.45 per cent to €170,000 – a fall of €2,500. However, prices for this house type were still up 6.94 per cent annually and have now risen by €25,000 in the past two years.
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 per cent 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,” he said.
“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.”