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Property prices in Ireland up almost 15% in last year
Residential property prices in Ireland have increased by almost 15% in the last 12 months, according to the latest data from the Office of National Statistics. In the year to August, residential property prices at a national level, increased by 14.9%, up from 13.4% in July and an increase of 2.8% recorded in the 12 months to August 2013. Residential property prices rose by 2.3% in the month of August. This compares with an increase of 2% recorded in July and an increase of 0.9% recorded in August of last year. A breakdown of the figures shows that in Dublin residential property prices grew by 3.5% in August and were 25.1% higher than a year ago. Dublin house prices rose by 3.5% in the month and were 24.7% higher compared to a year earlier while apartment prices were 32.6% higher when compared with the same month of 2013. However, and ONS spokesman said that it should be noted that the sub-indices for apartments are based on low volumes of observed transactions and consequently suffer from greater volatility than other series. The price of residential properties in the rest of Ireland rose by 0.8% in August compared with an increase of 0.1% in August of last year. Prices were 5.6% higher than in August 2013. House prices in Dublin are now 39.2% lower than at their highest level in early 2007 and apartments in Dublin are 45.8% lower than they were in February 2007. A separate report by Myhome.ie says the average asking price for a home increased by 1.4% nationwide over the last quarter while in Dublin it rose 3%, taking the average asking price to €193,000. It is the sixth quarter in a row that Dublin has recorded an increase and puts the mix adjusted average asking price in the capital at €263,000, up €8,000 in three months. The annual percentage change for Dublin is 9.6%. Caroline Kelleher from DKM Economic Consultants and author of the report said that a supply problem in Dublin is continuing to drive price increases. ‘There were only 500 completions in the capital in the first quarter and given that the Housing Agency has forecast a requirement of 5,700 units in Dublin alone this year it is clear the current rate of completions falls significantly short. As a result our expectation is that prices will continue to rise over the coming months,’ she explained. The report also highlights a growing value gap between Dublin and elsewhere in the country with a semi-detached house in Cork some 66% cheaper than in Dublin. Continue reading
Prime house price growth in London slows as buyers lack urgency
Price growth in London’s prime residential markets has continued to slow over the past three months as buyers are in less of a rush, new research suggests. Caution first seen in the central London markets early in 2014 has spread to markets in other more domestic prime London locations, according to latest analysis from international real estate adviser Savills. At the same time, the prime regional and country house markets lost some of the momentum seen in the first half of the year and values in both prime London and prime regional markets grew by an average of just 0.5% in the quarter with gains in some parts of the market being offset by modest price falls elsewhere. ‘Despite an improving domestic economy, the effect of the higher rates of stamp duty introduced in 2012 is still being felt particularly around the £2 million mark and was compounded over the summer months by the Scottish referendum and ongoing discussions around a mansion tax,’ said Lucian Cook, Savills UK head of residential research. The continued slowdown in growth means that annual price growth in the prime markets of Chelsea, Belgravia and Knightsbridge averages just 3.3% having flat lined in the last three months. By contrast, slightly less expensive central London markets such as Notting Hill and Kensington have shown quarterly price growth slightly in excess of 1% in the quarter, taking year on year growth to 10%. Elsewhere in London, prices were all but static in the prime markets of south west London, a band that runs from Fulham to Richmond and Wimbledon and south through Wandsworth, as prices rose by just 0.1% in the quarter. ‘These affluent domestic markets were the star performers of 2013, with 14% growth, but now look fully valued to buyers who are constrained by more stringent mortgage lending criteria and looming interest rate rises,’ said Cook. ‘Instead, it is the markets of Islington, Canary Wharf and Wapping that have proved the most resilient, having seen double digit price growth in the first nine months of this year despite a slowing in the traditionally quieter summer period,’ he added. The report also shows that beyond London other prime urban markets such as Oxford, Cambridge and Bath have benefited from a flow of London wealth with prices rising by 1.2% in the quarter and 7.6% in the past 12 months, although this has not been replicated elsewhere. The slowing in the prime markets of southwest London has slowed price growth along the wealth corridor in locations such as Cobham, Esher and Weybridge, while an entrenched price threshold around £2 million has reduced the price growth in the country house market. In the £2 million plus market beyond London prices rose by just 0.1% in the quarter, leaving annual price growth at just 3.8%. ‘In line with our forecasts, it is now becoming clear that taxation… Continue reading
Many aspiring home buyers in the UK facing uphill struggle to save a deposit
Over a third of aspiring first time buyers in the UK have given up hope of ever being able to raise a deposit to buy a home, new research has found. Currently first time buyers need as little as a 5% deposit to qualify for a mortgage under the government’s Help to Buy scheme but this is due to end in the first few months of 2017 meaning that first time buyers will then need a much bigger deposit. The research from mortgage insurer Genworth says that it will mean a return to 20% deposits which would see the time needed to save for a deposit rise from three years to over 10 years. The research also shows that of those who can afford to save for a deposit they are putting aside £246 on average each month. With 3% annual interest, someone who started saving today would need two years and 10 months to reach £8,655 and would hit this target by July 2017. They could do so by the beginning of 2017 by saving just £33 extra each per month. But the return to a norm of 20% deposits as was common in 2011 to 2013, would mean them needing to save £34,662 in 2017. With monthly savings of £246 gaining 3% annual interest, it would take a buyer more than seven years longer to do so. Anyone starting to save today would not hit this target until November 2024 by which time an extra seven and three quarter years of house price growth would be likely to mean they are still left unable to buy a home. The same Bank of England forecast of 20% house price growth over three years also means aspiring first time buyers could face prices which are rising far faster than they can save. Reaching £173,308 by the first quarter 2017 would mean the average first time buyer property price gaining £28,876 since the beginning of this year. This is 3.12 times the £9,249 a typical first time buyer can save up over a three year period and the equivalent of house prices gaining £3.12 for every £1 saved towards a deposit. The firm says that Help to Buy has given aspiring first time buyers a lifeline by boosting access to loans with deposits starting from 5%, making it far more achievable to buy despite the forecast rise in house prices. ‘Trying to buy your first home in the current climate is like chasing a runaway train. Even with good salaries that could comfortably support a mortgage, thousands of aspiring first time buyers can only save modest sums, especially those who are already paying rent. This deposit trap is why many feel they are left with the all or nothing choice of borrowing from family or waving goodbye to ever owning a home,’ said Simon Crone, vice president for mortgage insurance Europe at Genworth. ‘Help to Buy has significantly improved access to mortgages with deposits that are actually realistic to save. The numbers… Continue reading
