The sharp increase in Irish house prices over the past year could continue in the near future, analysts say. In a recent survey of estate agents, four out of five surveyed predicted that national property prices would rise in the next year. The same survey also found that prices in some regions could rise by as much as 7 percent.
However, the rise in prices is most significant outside of Dublin. While experts predicted a rise of 4 percent in Dublin, a sharper increase is projected in areas outside the capital city. In Leinster, the rise is expected to be 6 percent, and prices are expected to increase by as much as 7 percent in Munster, Connacht and Ulster.
The Society of Chartered Surveyors Ireland (SCSI) and the Central Bank of Ireland Residential Property Price Survey was conducted in May, surveying over 200 estate agents. In this survey, the estate agents blamed the higher price forecast on homes outside of Dublin on the “covid effect”. The experts said that covid lockdowns and remote work situations have increased the attractiveness of regional properties outside of Dublin.
In the survey, the agents also took into account the lack of housing supply across the country, mirrored by an increased number of inquiries and viewings. This trend was observed by over 80 percent of agents, the survey said. This lack of supply was driven by construction lockdowns spanning the last year and a half, and some experts have predicted that it may take upwards of three years to return to a normal level of supply. Combine that with the increased demand, and the result is the worldwide surge in housing prices that is currently being observed.
Now, some construction is being resumed, but steep increases in the prices of building materials likely means that prices will continue to rise in the near future, says SCSI President TJ Cronin. Speaking on the construction shortage, he said “Over the last 16 months the construction sector was closed down several times and the cumulative impact of the slowdown on new home construction will be with us until 2023 at least.”
Shirley Coulter, CEO of the SCSI, echoed Cronin’s statements regarding the housing crisis. She said that the pandemic and its consequences made the already existing crisis significantly worse. She added that the measures needed to bring the market out of its current state would be significant. “We believe 400,000 new homes – social, affordable and private builds – will need to be built over the next 10 years to meet pent-up demand and the needs of our growing population,” she said.