HOUSE PRICES NATIONALLY are expected to rise by 5% in 2022, according to a new report by the Society of Chartered Surveyors Ireland (SCSI).
The new report, published this morning, says that across most of the country the median increase in price will be 5%, while there will be a sharper rise in Connacht/Ulster, where a 7% increase is expected.
Nine in 10 SCSI estate agents believe that house prices will rise this year, with a majority of those believing that it will be due to market factors, including the lack of supply of new and existing houses.
“Our survey shows the key factor affecting property prices all over the country is the low level of new housing supply. In Q4 2021 85% of agents reported having low levels of stock available for sale,” said TJ Cronin, the President of the SCSI.
“When you combine that lack of supply with the two other key issues identified by our members as affecting property prices – namely pent-up demand due to Covid and buyers having an enhanced level of savings due to the pandemic – it’s clear prices are only going to go one way.”
Cronin says that while the housing market did slow down in the last quarter of 2021, he expects the bulk of the price rises in 2022 to occur in the first quarter of 2022.
“Although the market slowed in Q4 our members are predicting a 3% increase in prices in the first quarter as new buyers come into the market. They believe the rate of inflation will then moderate to a median of 5% nationally for the year.”
“However, in Connacht/Ulster where prices are comparatively lower, agents are predicting a 7% rise in prices.”
The median price of a home nationally, according to the Central Statistics Office, is €275,000.
Increasing that by 5% translates to €13,750, leading to a final cost of €288,750.
In Dublin, the average cost of a house is €400,000, meaning a 5% increase would equate to €20,000. This would see the average house price in Dublin increase to €420,000.
In its report, the SCSI estimates that 40,000 homes need to be built each year to meet the current demand for housing, despite residential property completions only set to hit 30,000 in 2023.
Cronin said that to meet the demand, the cost of building homes must be driven down, and pointed to research carried out by the SCSI that delays caused by judicial reviews can add between €8,000 and €12,000 to the cost of each individual unit.
The report also estimates that rents will rise in the next 12 months, with 79% of SCSI estate agents believing that rents will increase.
Of the agents who said rents would rise, 74% expected them to rise up to 5%, while 24% expected to see them rise between 5% and 10%.
Cronin said that the lack of supply within the rental market, similarly to the property market, is causing rents to rise.