21 May 2022

Level of pent up demand will fuel Kilkenny house prices for rest of year

Level of pent up demand will fuel Kilkenny house prices for rest of year

The level of pent up demand will fuel Kilkenny house prices for rest of year according to the property price index figures.

Commenting on today’s CSO Residential Property Price Index for February, Brokers Ireland said a further rise in prices, this time a jump from 2.65% to 3% between January and February, reflects the strong demand amid decreasing supply – the latter down 8% month-on-month in February.

Rachel McGovern, Director of Financial Services at the organisation which represents 1,225 Broker firms, said: “With large numbers of people chasing too few properties it is worrying in terms of prices for the remainder of the year.

“However, one would hope that as the economy opens up further with the vaccine programme underway there would be something of a pent-up supply released onto the market but we simply don’t know at this stage what the scale of that will be.

“Many would-be sellers have been holding off putting their properties on the market, and no doubt some builders are also holding off on putting properties on the market, especially with the severe pandemic restrictions on showing properties,” she said.

Ms McGovern said lenders are likely to remain risk averse, having become more so than ever during the pandemic and that will impact the availability of mortgage finance for certain cohorts.

“On the other hand the Help-to-Buy scheme is due to finish at the end of this year and it will likely create something of a rush in the final months of the year.

“The bottom line is that the supply of new properties must be increased. Unfortunately though there is little evidence so far that anything different is being done to ensure supply is ramped up.  It doesn’t engender confidence to see various arms of the State squabbling among each other about the costs of building at this very advanced stage in what some time ago has been deemed a housing crisis,” she said.

The Central Bank estimates that 34,000 new homes are needed every year for a decade.  Yet in 2020 just 20,676 new dwellings were built.

“That the latest debate is about whether or not house buyers should hold off on buying homes for two years to allow prices to stabilise is tragic.

“We would always encourage home ownership once one can afford to buy a home. It is so critical to the growth of personal wealth over the longer term,” she concluded.

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