The overall average house price increase for 2021 was just under 12%, although there was wide variation across the country, according to the latest IPAV Residential Property Price Barometer. (the Institute of Professional Auctioneers and Appraisers), which captures house prices actually achieved by auctioneers for three- and four-bedroom semi-detached houses and two-bedroom apartments.
Providing a county-by-county breakdown for each property type, the latest barometer records prices in the second half of 2021 and compares them to prices in the first half.
Westmeath saw an increase of 7.2pc in the three-bedroom category over the last six months of the year, 11.11pc for four-bedroom homes and 11.91pc for two-bedroom apartments.
Longford saw an increase of 3.45pc in the three-bedroom category over the last six months of the year, 9.68pc for four-bedroom homes and 7.14pc for two-bedroom apartments.
Laois saw an increase of 6.48pc in the three-bedroom category over the last six months of the year, 4.9pc for four-bedroom homes and 8.42pc for two-bedroom apartments.
Offali saw an increase of 6.9pc in the three-bedroom category in the last six months of the year, 10.37pc for four-bedroom homes and 7.35pc for two-bedroom apartments bedrooms.
Pat Davitt, managing director of IPAV, said that in 2021 in particular, the gap between prices asked and prices obtained was crucial, given the intense demand and the scarcity of supply, leading to a trend according to which agreed prices often exceeded asking prices, sometimes by a considerable amount. diploma.
“However,” he said, “there are a myriad of factors, and many buyers, especially those with family ties to the country, now see living in the country as a realistic and more affordable option. given the new hybrid work arrangements”.
He said there is more interest in coastal properties or unique properties. “Therefore, we are seeing higher increases this time around in areas like Wexford, Clare, Mayo and Donegal.”
And he said while prices are now close to 2006/7 levels, the market is starkly different: “At that time there was no shortage of supply – we were building 93,000 units a year. . Loans were excessive and banks often approved several potential buyers for the same property. They ended up competing with each other, driving up prices.
“In contrast, we now have a shortage of supply and strict lending practices, thanks to the macroprudential mortgage rules of the Central Bank of Ireland. Many properties are bought with savings and parents contribute deposits for children. young buyers.
Mr Davitt said that since rental levels exceed the cost of paying off a mortgage, often to a considerable extent, and Ireland has introduced genuine long-term fixed interest rates of up to up to 25 and 30 years, where repayments are fixed for that entire period and cannot fluctuate regardless of market conditions, those hoping to own their own home are finding that it makes financial sense to trying to get a mortgage.
He said such mortgages at interest rates in the 3% range, although well above the eurozone average, are unprecedented.
However, he said the scarcity of supply is a real problem. “The current market favors those with higher incomes and those fortunate enough to have family support.”
He said in some cases it also prevents potential sellers from putting their properties on the market in case they cannot find suitable homes, or when they do, the prices they will have to pay may have exceeded their planned budgets.
The IPAV called for adjustments to the Central Bank’s mortgage rules, particularly to help middle-income people who could afford to pay off a mortgage, “if only they could get one”.
Mr Davitt said supply was improving but so far not fast enough. “We need measures that tackle the serious obstacles to planning, the tax on buying a house where mortgage holders borrow money and pay interest on these loans for the duration of the mortgage to cover the initial VAT costs.
“Unless these issues can be resolved without further delay, the storm clouds of rising inflation could sabotage many potential buyers. Although the ECB does not foresee an interest rate hike for 2022, if the current high levels of inflation in the EU persist, this situation will undoubtedly change, hampering the ambitions of some buyers but also affecting the prices of real estate, which for now seem to be on an upward trajectory.