Rush for mortgages is pushing up prices faster than in boom
Mortgages are squeezing out cash buyers in large numbers for the first time since the downturn, helping drive house price rises to boom-time levels across swathes of the country.
Property prices in at least eight counties are now rising faster than during the boom years, as competition for homes continues to heat up.
During the property boom a decade ago, prices rose at a rate of 1pc or more per month.
But according to data published today in the Q2 Irish Independent/Real Estate Alliance (REA) Average House Price Survey, there were hikes of 4pc or more in the past three months in several areas.
The greater availability of mortgage cash is also highlighted in the fact the percentage of deals controlled by cash buyers has fallen below 30pc for the first time since the survey began.
For many years cash buyers dominated the market, and the proportion of sales attributed to them lingered at between 40pc and 60pc.
But in Dublin, mortgaged purchasers now make up 78pc of the market, and in commuter counties this rises to 81pc, the highest rate of mortgaged purchasers nationally.
The average semi-detached house nationally now costs €215,269, the survey has found – a rise of 2.5pc on the Q1 figure of €209,944. The most significant price hikes included counties Cavan (6.6pc), Cork (4.8pc) Laois (7.1pc), Leitrim (4pc), Louth (4pc), Offaly (6.9pc), and Sligo (5.1pc).
But the county with the fastest rising prices was Longford, which saw the value of an average three-bed semi-detached property soar by 8pc since March – representing an increase of more than one-third if sustained over a year.
With Dublin stock now running at less than one-tenth of what it should be in a “normal” market, homes are selling faster than ever – agents in south Dublin locations such as Tallaght, Clonskeagh and Dún Laoghaire are reporting that properties which took seven weeks to sell a year ago, are now moving to sale agreed in just three weeks.
The price of an average house in Dublin rose by 2.6pc in the second quarter, with three-bed semis in the capital now taking as little as three weeks to sell.
The average three-bed semi-detached in Dublin city now costs €414,500, a rise of €10,000 (2.6pc) over the past three months and an increase of 14.1pc over the past year.
The survey concentrates on the actual sale price this week of Ireland’s typical stock home, the three-bed semi, giving the most up-to-date picture of the property market in towns and cities countrywide.
Overall, the average house price across the country has risen by 11.2pc over the past 12 months – in contrast to the 4.5pc increase registered to the full year to June 2016.
But not all areas are seeing surging prices. Values remained static in the past three months in counties Tipperary, Roscommon and Waterford.
While new building is still in its infancy, developments in small pockets of the country have already impacted on the price and demand for second-hand properties locally.
“Agents in areas such as Ashbourne, Co Meath, north east Wicklow, Waterford city and Rathfarnham, Balbriggan and Rathcoole have been reporting that where there are new homes available, the price of second-hand properties has been under pressure,” said REA spokesperson Healy Hynes.
“This is understandable as most of our national housing stock is over a decade old, and house purchasers – especially first-time buyers – will opt for new builds at a higher spec.”
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