Residential asking prices up 5% across Ireland in second quarter of 2016

Taylor Scott International News

Asking prices for newly listed properties in Ireland increased by 5% nationally and by 3.6% in Dublin in the second quarter of 2016, the latest figures show. As housing supply continues to decline, average time to sale agreed has fallen to just four months, according to the property report from MyHome in association with Davy. The report says that Brexit may dampen medium term expectations but the UK’s decision to leave the European Union is not expected to have material impact on the Irish housing market in 2016. It also says that while the sharp gains in asking prices mainly reflect the recovery in house prices across the country with newly listed properties in Dublin rising by a more modest amount this is still four times the 0.9% increase recorded in the capital in the first quarter of the year. The mix adjusted asking price for new sales nationally is now €231,000 and €326,000 in Dublin, an increase of €11,000 for both markets compared with the first quarter of the year. For the entire stock of properties listed for sale on the MyHome website the national mix adjusted figure is €213,000, up 2.5%, the biggest quarterly increase since the third quarter of 2006. In Dublin the figure is €296,000, up 2%, which brings it back above the level seen in the second quarter of 2011. The author of the report, Conall MacCoille, chief economist at Davy, said the supply shortage and wage inflation were the key factors underpinning the latest price surge and pointed out that the number of homes for sale is down 6.7% on last year to 23,520, which is close to historical lows. ‘Not surprisingly properties are selling increasingly quickly with the average ‘sale agreed’ time falling to just four months, a new low. Outside of Dublin it has fallen to 4.8 months, the first time it has fallen below five since the financial crisis of 2008. While the government has outlined ambitious housing plans, there is no prospect of the shortage of housing supply being alleviated by new construction in the near term,’ he explained. ‘At the same time, home buyers are feeling the heat and reacting to the lack of supply by taking out ever higher mortgage debts, helped by rising wages and growing consumer confidence. In May the average mortgage approval for house purchase rose to €208,000, the first time that the average mortgage approval has exceeded €200,000 since the series began in 2011,’ he added. MacCoille believes that overall the data points to sharp gains in Irish house prices through the remainder of 2016. ‘While the potential impact of Brexit remains something of a wild card, its overall impact on the Irish economy and broader fears regarding the health of the European economy could help to temper medium term expectations for house price growth,’ he said. ‘However that probably won’t emerge until… Taylor Scott International

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