Estate agents expect house prices to rise by 4.5 per cent on average over the next 12 months, according to a survey undertaken by the Central Bank. Despite some recent weakness in price trends – notably in Dublin – the survey showed that estate agents expect house prices to continue on a solid upward trend.
Prices should increase through the key summer months, according to a commentary by Davy stockbrokers, with recent surveys showing a rise in asking prices. However after the Brexit vote and in the light of market trends, estate agents have cut their estimate of residential house price inflation in Dublin to 3 per cent, from 5 per cent previously.
Elsewhere larger price increases are expected. Estate agents expect prices in the mid-east – the key commuter counties around Dublin – to rise by 10 per cent over the next 12 months and by 15 per cent over three years.
Irish housing transactions rebounded after the crash, Davy points out, but are now being held back by the lack of new housing supply. Estate agents reported a a fall-off in instructions to sell and new buyer inquiries in the second quarter. Separate data has shown a rise in the value of transactions in the market, but a fall in the actual number of deals being done, representing a sharp slowdown in activity from 2014 and 2015 growth levels.
“ With homebuilders citing high construction costs for making projects unviable and the Central Bank resolute that leverage on mortgage lending will be constrained, it is not clear what can break the logjam,” according to the Davy commentary.
The next key focus will be the housing measures promised in the October budget, where a particular focus is expected on steps to help first-time buyers. In November, meanwhile, the Central Bank will announce its response to a consultation period on its prudential lending rules, which put new restrictions on lending.