National property prices to increase by an average of 5% over the next 12 months
Over half of the agents - who are members of the Society of Chartered Surveyors Ireland (SCSI) - believe the key factor influencing house prices over the next 12 months will continue to be the supply - or more accurately the lack of supply - of new housing.
A total of 88% of agents believe current residential property prices are expensive or very expensive – up 5% since January – while just 12% believe they are currently fair value, according to the latest SCSI Residential Mid-Year Market Monitor.
The report also found that affordability challenges have intensified for first time buyers around the country and a couple on a combined income of €107K who want to buy an averagely priced new three-bed semi-detached house and have the 10% deposit will afford to buy in only one of five locations.
In the two most expensive counties, Wicklow and Kildare, the couple will face shortfalls of €65,000 and €22,000 respectively for that house type.
The average purchase price of a new three-bed semi in Meath is €482k; in Kildare €500k and €548k in Wicklow while in Cork it's €459k and €485k in Galway.
When asked where they believe we are in the market cycle, 60% of respondents believe prices are increasing but will level off soon – while 18% believe they have peaked and should start to decline.
Gerard O'Toole, President of the SCSI, said the report indicated mounting concern over the supply situation and by extension with a recent slowdown in home construction.
'Fifty-one percent of agents in our survey cite lack of supply as the main factor driving price inflation, up from 46% a year ago. In 2023, the figure was 35%, so we can really see the impact the lack of supply is having on house prices.
'At the same time, 70% of agents are reporting low stock levels of new and second-hand homes, again underscoring the persistent challenge of limited supply in the market.'
'Over the past five years more than half of agents have consistently highlighted low stock levels, stressing that constrained supply remains a fundamental issue impacting the market.'
'With the ESRI forecasting that 37,000 new homes will be built this year, well short of the Government's target of 41,000, the urgent need to address infrastructural shortcomings and for the Housing Activation Office to become fully operational as soon as possible cannot be overstated.'
'The other main factors, which our members believe are influencing price movements include the state of the economy (20%), while a further 16% said the continued availability of government support schemes such as Help to Buy and First Home Scheme are influencing house prices.'
'Looking at where we are in the market cycle, 78% of agents believe prices will level off soon or have already peaked. In the medium to long term, the only way to ensure prices stabilise is to ramp up supply' Mr O'Toole said.
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