Residential house prices rose 14.4% nationally in the year to December 2021, with house prices outside Dublin increasing by 15.4% and in the capital by 13.1%.
This marked an acceleration in house price increases of .4% from the previous month, with figures showing a price increase of 14% in the year to November 2021.
House prices in Dublin remain 11.3% below their February 2007 peak, house prices in the rest of the country are just 5.7% behind their May 2007 peak.
Figures indicate an increase in the volume of home transactions of 3.6% in December 2021 as compared against December 2020. Of the 46,419 home purchases in the year to December 2021, 31.7% were purchased by first-time buyer owner-occupiers, 54% were movers, and institutional investors and housing bodies made up 14.3% of home transactions.
The Society of Chartered Surveyors Ireland estimate that house prices will continue rise by 5% in 2022, with the biggest factor affecting property prices being the low level of new housing supply, along with pent-up demand due to Covid and an enhanced level of savings.
New home completions continue to run below estimated demand of 30,000 units per year, with 21,000 units completed in the year to September 2021.
On a positive note, there was a 42% increase in the number of commencement notices issued for 2021 over 2020, with a total of 30,724. Planning permissions for the first three quarters of 2021, although lower than the same period in 2020, were well above 2018-2019 levels, an encouraging sign for the continued growth in activity in the coming years.
Housing for All, the Government’s housing plan, should also assist in increasing supply to meet the country’s large and growing housing demand.
Potential obstacles to this goal include labour shortages in the construction sector, ongoing delays in the planning process, materials’ shortages and supply chain issues.
About the Author: Kevin McCague, Solicitor on the Property Team.