The Rapid price growth in Dublin’s residential property market is likely to continue until more supply comes on-stream to meet the demand for new housing units, according to Savills Ireland.
The comments came in response to the CSO’s Residential Property Price Index for the year to December. It showed that residential property prices in Dublin rose by 15.7% in the year, while prices nationally increased by 6.4%.
Graham Murray, Head of Residential with Savills Ireland said, “There is a clear supply and demand issue, particularly in Dublin, and this is why we are seeing a rise in house prices. This is likely to continue until more new housing stock becomes available on the market. At the moment this is not happening for a number of reasons, such as planning barriers set down by some development authorities and the restricted availability of development finance.”
Mr Murray also noted that the growth in residential property prices could be higher than reported, “The increase in residential property prices is based on mortgage financed transactions. It does not include cash funded deals which represent a significant proportion of activity, particularly at the higher end of the market.”
Calculations by John McCartney, Director of Research at Savills, indicate that 25,000 additional housing units are required each year to offset depreciation of the existing housing stock and to meet the demand from Ireland’s growing population. However Savills’ research highlights the need for family homes rather than apartments because the number of 20-29 years olds in Ireland has fallen dramatically in recent years.