The housing market in Dublin will be susceptible to large house price jumps until the supply issue is resolved, according to the CIF.
This follows the publication of the latest CSO data which shows that Dublin house prices rose by 3.1% in April and are up 17.8% on last year.
The CSO statistics also recorded a 1.4% increase in national property prices in April, while on an annual basis prices were up 8.5% across the country.
Speaking about the report, CIF Director General Tom Parlon said, “These latest statistics should come as no surprise to anyone who has been following the property market. A shortage of supply means the level of demand is not being catered for and this is leading to an increase in prices in Dublin and certain other urban areas.
“Despite the ESRI and the Government stating that we need 25,000 units built annually to meet the country’s demographic needs, we are not coming close to that figure. Last year only 8,301 units were completed throughout the country, including just 1,360 units in Dublin. This year the market is likely to have a maximum of 10,000 units built nationally and less than 2,000 in Dublin. That simply isn’t enough.
“Until we see discernible action taken to help increase supply then Dublin and other areas will continue to be susceptible to large house price jumps. It’s simple economics, if more people are looking to buy houses than the market is able to supply then this will lead to an upward pressure on prices.
“There were a number of measures included in the Government’s recent strategy on the construction sector, Construction 2020 which potentially could bring about extra supply. But we need to keep moving forward and flesh out the details in that strategy.
“You can’t just flip a switch and have more housing. It takes 18 months to 2 years for large housing developments to be brought to market. Given the timeframes involved we can’t afford to delay, we need to take action soon. The longer it takes to fix the problems, the greater the impact it will have on house prices,” Mr. Parlon concluded. www.cif.ie