SCSI expects residential property prices in Ireland to increase by 7% in 2017
National property prices are set to rise by an average of 7% in 2017 with even higher price increases predicted for the Leinster region according to the Society of Chartered Surveyors Ireland. According to the SCSI’s Annual Residential Property Review and Outlook Report 2017, the price of the most popular house type, the 3 bed semi detached is predicted to rise by an average of 9.4% nationally.
Chartered Surveyors in the Leinster region, excluding Dublin, anticipate the greatest increases across all housing unit types with an increase of 11% projected for 1 and 2 bed apartments and a rise of 10.6% forecast for 3 bed semis. The price of a three bed semi in Dublin is predicted to rise by 9.5%.
The survey predicts that residential rents will rise on average by between 8 to 10% outside of the rent control areas of the four local authority areas of the Dublin Region and Cork City Council area. Annual rent increases are capped at 4% in these designated pressure zones. The Government is reported to be planning to extend these zones to 20 more towns.
Over 380 estate agents and Chartered Surveyors took part in the survey in late November/early December. Future Analytics Consulting was commissioned by the SCSI to carry out the research.
Ronan O’Hara Chair of the SCSI’s Residential Agency Group said the lack of supply, public policy and projected economic growth may continue to inflate house prices, but he warned that the latter could not be taken for granted given the uncertainty caused by Brexit.
“Four our out of five surveyors (78%) outside Dublin believe Brexit will have a negative impact on our economic growth. While this figure drops to 50% in Dublin, it shows the uncertainty which exists for the coming year.”
“The drop in sterling has reduced the buying power of people looking to move here and that is probably one of the reasons why thirty six per-cent of surveyors across the country believe that Brexit has already had a negative impact on residential activity levels. Interestingly, a clear majority of surveyors (62%) anticipate that additional countries will vote in favour to leave the EU over the next 3 years.”
“On the other hand, the changes which the Central Bank made to its lending rules and the introduction of the ‘Help to buy’ scheme are likely to contribute to an increase in activity in the short to medium term. Eighty per-cent of respondents to our survey believe ‘Help to buy’ will lead to price increases in the coming year. While this is good news for vendors, struggling first time buyers will be disheartened. While rising prices will probably encourage more builders to start building houses it really is up to Government to tackle some of the underlying issues – including high construction costs – and to make housing more affordable.”
“The issues shouldn’t come as a surprise. Surveyors in Dublin highlighted the shortage of development land as the biggest hurdle while in the other three regions surveyors saw construction costs and the availability of finance as the main challenges” O’Hara said.
The main findings:
- The biggest property price increases in 2017 will be outside of Dublin
- 36% of Chartered Surveyors say Brexit has already had a negative impact on residential activity levels
- 80% of surveyors believe the Government’s ‘Help to buy’ scheme will lead to price increases in 2017
- The introduction of permanent rent controls was ranked as the most negative measure for rental supply
- Commencements of residential property in 2016 were three times higher outside Dublin