The cost of property throughout Ireland has skyrocketed over the last 20 years. With the uncertainty in regard to Brexit, prices of homes are said to increase by less than recent years. Slower growth in price of homes may appear to be beneficial for the Irish housing market, but in reality costs of property are still trending to increase in price. Prices rose by 3.9 per cent compared to 4.3 per cent one month earlier. The increase is about four times less than the average percent growth increase of past years in Ireland.
So how will Brexit effect the housing market in Ireland? Some individuals believe that if the deal goes through, Ireland could play a more significant role in Europe. This trend is becoming prominent in Dublin. Massive companies like Facebook, Google, Paypal. eBay and Microsoft have moved their headquarters to Ireland. This change over the last few years means that there will be an increase in jobs and thus an influx of people. The more people means demand for housing will only further increase. If there is no-deal in regard to Brexit, interest rates are expected to rise. This will only increase the difficulty to borrow and buy properties. The Brexit debate is said to have a final deadline of 31 October, but until then anticipation in all parts of the housing market continues to escalate.
The decreasing rate of increase of housing prices is a good sign, but a major issue with in the housing market still remains. Many potential buyers are unable to afford housing due to such high demand and such little supply.
The housing crisis remains unsolved. Property prices remain almost ten times the average persons salary. It seems as if attempt to create more housing fails to meet demand. This is shown through failed government initiatives to help supply more housing but fails to meet the exponentiating need for more housing.
What does this mean for the mortgage market? Mortgage approvals are continuing to fall. This is because the Central Bank sets lending limits, and buyers are only able to receive loans to three and a half time their annual income. On average this amount falls incredibly short of what is needed to buy a home that satisfies the consumer’s needs. However, due to the precedent instilled to minimize risk seen in the mortgage rules property prices are constrained form exponentiating.
Overall this year, Residential properties within Dublin have increased less than cost of homes though out the rest of Ireland, and housing in mid-western Ireland properties remains the most expensive on average.