Home prices nationwide are expected to rise 5% in 2022, according to a new report from the Society of Chartered Surveyors of Ireland (SCSI).
The new report, published this morning, says the average price increase in most parts of the country will be 5%, while there will be a sharper rise in Connacht/Ulster, where a 7% increase is expected.
Nine out of 10 SCSI real estate agents believe home prices will rise this year, and the majority of these believe that it will be due to market factors, including a lack of supply of new and existing homes.
Our survey shows that the main factor affecting property prices across the country is the low level of supply of new housing. In the fourth quarter of 2021, 85% of dealers reported low levels of inventory available for sale, said TJ Cronin, president of SCSI.
“When you combine this lack of supply with the two other key issues that our members have identified as affecting property prices – pent-up demand due to Covid and buyers with an improved level of savings due to the pandemic – it is clear that prices are only going to go one way.”
Cronin says that although the housing market slowed in the last quarter of 2021, he expects most of the price increases in 2022 to occur in the first quarter of 2022.
Despite the market slowdown in the fourth quarter, our members expect a 3% increase in prices in the first quarter as new buyers enter the market. They believe the inflation rate will then decline to a nationwide average of 5% for this year.”
« However, in Connacht/Ulster where prices are relatively lower, dealers are expecting a 7% rise in prices. »
The median home price nationally, according to the Central Statistical Office, is 275,000 euros.
Increasing that by 5% translates to €13,750, resulting in a final cost of €288,750.
In Dublin, the average cost of a house is €400,000, which means an increase of 5% is equivalent to €20,000. This will increase the average price of a house in Dublin to 420 thousand euros.
In its report, SCSI estimates that 40,000 homes will need to be built each year to meet current housing demand, although completion of residential properties is only set to reach 30,000 homes in 2023.
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To meet demand, the cost of building homes must be reduced, Cronin said, and he cited research by SCSI indicating that delays caused by judicial reviews can add between 8,000 and 12,000 euros to the individual unit cost.
The report also estimates that rents will rise in the next 12 months, with 79% of SCSI real estate agents believing that rents will rise.
Among the agents who said rents would rise, 74% expected them to rise to 5%, while 24% expected them to rise between 5% and 10%.
Cronin said a lack of supply within the rental market, similar to the real estate market, is causing rents to rise.
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