PROPERTY VALUES ARE expected to continue to increase in 2016 according to the Society of Chartered Surveyors Ireland (SCSI).
Prices of three bed semi-detached properties are expected to rise by between 4 and 8% depending on location, while rents are predicted to rise by between 5 to 7%.
That’s according to the SCSI Annual Residential Property Review and Outlook Report for 2016.
According to the national survey of over 700 estate agents and Chartered Surveyors – nationally property values are estimated to have risen by around 8.8%.
Values are estimated to have increased by 9.4% in Leinster (excluding Dublin) while in Munster and Connacht/Ulster they rose by 10.4% and 8.8% respectively.
While Dublin property values rose by 19.5% in 2014, the rise moderated to 4.8% last year.
Chairman of the SCSI Residential Agency Professional Group, John O’Sullivan, said the Central Bank’s lending rules had dampened price growth in Dublin and displaced it to neighbouring counties:
This happened because potential buyers were unable to justify the cost of buying in Dublin or were unable to access the necessary finance
“According to our survey, 47% of Dublin based respondents believe that, in the absence of the Central Bank rules, values in Dublin would have grown by between 9.8-14.8%. That’s 5 to 10% more than the actual increase of 4.8%.
“The outlook remains fragile however and is dependent largely on the employment opportunities and investment for regional towns.”
The growth in rental prices is now outperforming the growth in property values with average rental values in the private market increasing by 12% nationally.
In Dublin, rents increased by an average of approximately 12.1%, in Leinster by 14.2%, in Munster by 11.1% and in Connacht/Ulster by 9.4%.
The survey attributed this trend to the shortage of supply in the sales market which is putting disproportionate pressure on the rental market.
Further increases in rental values are being predicted for the year ahead, with the average rental value for a three bed semi-detached property expected to increase by a further 5 to 7% depending on location.
The survey also found that the supply of housing will continue to be an issue in 2016, with 80% of respondents saying they believe the supply of new homes will be less than demand in Dublin while the figure in Munster is 69%. O’Sullivan added:
According to the ESRI we need to build up to 25,000 units a year up to 2029. It’s estimated the completions figure for 2015 will be around half this at 12,500.
“It’s clear more needs to be done in terms of tackling construction costs, the availability of development finance and speeding up the planning process.”