This week saw the issuing of two major house price surveys with both the Daft.ie 2014 Year in Review House Price Report and the MyHome.ie Quarter Four Report on 2014. According to the Daft.ie report the average house price nationwide is €193,000 while the average house price in Mayo is €121,000. The four per cent increase recorded in Mayo in 2014 contrasts with a fall of 8 per cent a year ago. Average house prices in Mayo are still 54 per cent below their peak in 2007.
Meanwhile the MyHome.ie report has found that the price of three and four bed semi-detached homes in Mayo in the fourth quarter of 2014 remained the same as they had in the same quarter in 2013 at €100,000. That report also found that the price of four bed semi-detached homes unchanged at €120,000
Commenting on the figures in the Daft.ie report, author of the Daft.ie report, Ronan Lyons, said the proposed Central Bank limits on mortgage lending seem to be affecting both buyer expectations and the credit available to them.
“It seems that, even though the limits have not yet come into force, they have already had some impact,” he said.
“For example, when asked what they expected will happen Dublin house prices over the coming 12 months, survey respondents in September expected an increase of 12 per cent. In December, however, that figure had fallen to five per cent.
“Restricting the amount lent to each household is a necessary first step to ensuring a stable housing market. The second step is addressing the cost base, to ensure an adequate supply of housing,” added Mr Lyons.
While Caroline Kelleher from DKM Economic Consultants is quoted in the MyHome.ie report saying: “The Central Bank’s new guidelines on mortgage lending which are expected to introduce a Loan to Value limit of 80 per cent for new lending along with separate proposals to restrict any residential mortgage to 3.5 times gross annual income have the potential to limit the rate of price increases seen in recent times.
“However there is some uncertainty over whether or not these will be implemented as originally outlined. In addition the relief on capital gains tax introduced in 2011 to incentivise the purchase of property has terminated and this is likely to stem the rate of investment in buy to let properties in 2015,” she added.