Lack of housing supply key to price in Dublin

Up to 400 turn up for launch of scheme

Supply is key to why house prices are rising in the capital.

Supply is key to why house prices are rising in the capital.

Wed, Aug 21, 2013, 01:01

For some the latest figures from the CSO might be surprise. For those who have been house-hunting in Dublin, the statistics simply back up evidence seen on the ground.

When we first started looking for a house in spring 2012, I viewed a four-bed semi-detached property in Stillorgan/Blackrock, which sold for € 445,000. Late last year a neighbouring property (in similar condition) was put up for sale at the same price level.

So how much did it make? According to the price register, it actually sold for €515,000, an increase of about 15 per cent or so.

According to Keith Lowe, chief executive of Douglas Newman Good, the increase in prices about the simple law of supply and demand.

“It’s about the lack of availability of housing stock.

“Firstly, so many people who are in negative equity are not in a position to sell their property; secondly, people who are on tracker mortgages can’t take them with them – if they were to do so there would be more liquidity in the market; and, thirdly, there is no new house-building in the capital.”

400 people
Last weekend Sherry FitzGerald launched a new Belmont development in Stepaside, Dublin 18.

The first day was well attended, with as many as 400 people turning up. By the time the agents had locked the doors for the evening, 15 deposits had been taken for 19 properties, which ranged in price from €265,000 to €390,000.

On the likelihood of prices continuing to rise, one agent I spoke to in the spring said he was urging people to put their houses on the market – because he felt prices would weaken in the autumn.

Wade Wise, of Beirne & Wise, isn’t so sure either and is not convinced that the much-touted rise in repossessions will convert into a boost in supply.

If supply does improve, he feels it will affect prices. “What will happen is we’ll plateau and there will be a flatline in terms of pricing.”

However, if supply doesn’t loosen and if mortgage lenders open their wallets that little bit more, upwards price pressure is likely to remain.