Growth in Irish property prices now fourth fastest globally
Prices to continue rising until supply increases to meet demand, economist says
Latest figures show Irish property prices rose by 13 per cent in the year to April, against a background of tight supply. Photograph: Aidan Crawley/Bloomberg
Irish property prices are now rising at the fourth fastest rate in the world, as experts say growth will continue until supply ramps up to meet demand.
According to the Knight Frank Global House Price Index for the first quarter of the year, Irish property prices are rising at the fourth fastest pace in the world, with growth of some 12.7 per cent in the year to March 2018.
This was behind only Hong Kong (14.9 per cent); Malta (13.6 per cent) and Iceland (13.2 per cent).
Supply constraints are a common feature of the fastest-growing countries – 96,000 apartments are due to be released in the next three to four years in Hong Kong, which might quell price growth, but the survey found that supply constraints alongside strengthening demand are together putting pressure on prices in both Malta and Jersey (12.1 per cent).
Overall, house prices are rising in 86 per cent of the 57 countries tracked by the index, with prices falling in Greece (-0.2 per cent), Italy (-0.3 per cent), Norway (-1.1 per cent) and Finland (-1.3 per cent).
Lack of supply is also a critical feature of the Irish market, leading to continued price growth. Latest figures show that property prices rose by 13 per cent in the year to April, against a background of tight supply. Last week the Central Statistics Office offered some clarity on the level of construction being undertaken, when it revealed that only 14,446 properties were built last year – far below official figures.
Investec economist Philip O’Sullivan said housing “remains the biggest domestic issue in the economy”, with a “significant disconnect between housing output and demand”. He forecast that it would be 2021 or 2022 before supply rose to meet demand, and as such, he expected prices to continue to rise.
However, some relief could be in sight with property website MyHome.ie, which is owned by The Irish Times, reporting a “ dramatic rise” in the number of houses available for sale in Dublin. Some 5,083 houses are currently on sale in the capital, up 32 per cent on last year.
MyHome.ie managing director Angela Keegan said rising prices “have encouraged more homeowners to put their properties up for sale”.