The spread of economic growth to the regions would appear to be responsible for a faster pace of growth in house prices for the second half of 2017. Much of this is coming from a low base however, with many properties still selling for less than the cost of building them.
That is according to Pat Davitt, chief executive of the Institute of Professional Auctioneers and Valuers (IPAV ), who was commenting on his organisation’s latest Residential Property Price Barometer. Mr Davitt said that prices will have to rise before builders find it viable to construct new properties.
“Sligo experienced the fastest pace of growth in the second half of 2017, with a 25 per cent increase over the year, bringing the price of a three-bed semi to €145,000, substantially below the cost of construction,” Mr Davitt said.
Six counties in Ireland have an average price of less than €134,000. Outside of Dublin, 12 counties experienced double digit growth in the second half of the year. The pace of growth slowed considerably in a number of Dublin areas, including Dublin 3 and 4; but five areas - Dublin 1, 2, 6, 7 and 9 - saw double digit growth.
“In Dublin, the price of a three-bed semi now varies from €290,000 in Dublin 24 to almost 3.5 times that in Dublin 4 at €987,000. In Cork City the price is €273,000 and in Galway City it stands at €268,000.
“In terms of the Dublin commuter belt, Kildare is growing at the fastest pace, way ahead of other commuter counties, at 16.7 per cent in the second half of 2017. This brings the average price of a three-bed semi in the county to €280,000.
“In overall terms, the lack of supply remains the biggest problem. The latest data from Goodbody indicates that last year a mere 9,513 new homes were issued with a Building Energy Rating, a better indication of new builds than ESB connections. While up 77 per cent on the previous year, it is appallingly low, with demand estimated to be running at about 40,000 homes a year,” Mr. Davitt concluded.