It’s been a long road to recovery for the Irish housing market, but so far the initial figures for 2014 indicate that it could be on the mend. Although the availability (or lack thereof) of family homes around Dublin and across Ireland does play a significant role in the price increases, figures from the Central Statistics Office have shown “strong evidence” for a recovery of Ireland’s housing market moving forward.
Price Increases In and Around Dublin
While the average cost of a home has risen across the country, the Dublin area has shown the largest increase in price overall. Compared to 2013, the first five months of 2014 have indicated a 15 to 20% price increase in the average family home. Current figures show a 22% increase compared to the same time last year. This means a home valued at €300,000 in 2013 is now worth nearly €366,000 in today’s market.
According to the CSO report, the average price increase across Dublin is nearly €44,000, bringing total average home values up to €242,600. Still, independent analysts say these increases are mainly in “desirable postcodes” and are almost 50% off the mark compared to prices in 2007 before the collapse of the housing market. In other words, we still have a ways to go before we go about throwing around the words ‘official recovery.’ It’s still good to see we’re making progress and there’s demand for housing in and around the Dublin area.
Price Increases Outside of Dublin
While prices outside of Dublin and in rural areas have also shown a price increase compared to this time last year, it’s not on the same scale. Alan McQuaid of Merrion Stockbrokers has forecast an average price increase across the rest of the housing market at 10% for the year. Keep in mind that the average does include areas of the country that have seen no growth at all, skewing the numbers in areas still hard hit by the recession. Goodbody Stockbrokers estimate the average price of a home outside of Dublin has risen to €183,000, up €18,000 on the year.
Credit availability still remains an issue with those looking to purchase homes, especially for first time homebuyers. The lack of available properties in the market has driven the price beyond the point that many can afford, hindering the recession efforts. As the labour market picks up over the second half of the year, we should see credit availability increase. This will continue to drive the price higher unless the housing supply available to consumers increases as the market improves.
The European Statistics Agency, Eurostat, found that properties in Ireland were one of the highest priced in the EU for 2013, with only Estonia, Latvia and the United Kingdom priced higher.
New Housing Construction Efforts Underway
Other efforts underway are trying to reverse the effects the lack of housing has had on housing prices over the last year. The National Asset Management Agency (NAMA) has announced it’s ready to start construction on nearly 3,000 properties in the Dublin area. 19,000 additional homes are at the pre-planning, planning or design stage. The agency has committed to providing funding for 4,500 new homes by the year 2016, and 22,000 homes over the next five years. The demand in Dublin stands at around 10,000 residential houses per year.