Happy New Year to you all and we at KPM Group hope you had a great Christmas and some well deserved time off. 2021 was certainly an interesting year that saw crazy gains across the board on property investments. As we get settled into the new year we look ahead to what may come.
House Price Rises
As sure as the sun will rise tomorrow, house prices will most certainly gain again this year. 2021 saw prices surge by an average of 12.8% nationally with Dublin seeing a 9% average increase. Swords in North County Dublin saw an increase of 27% for 3 bedroom semi-detached homes in the final quarter.
Further afield in commuter belts and communities, prices have risen 15% on average across the country with more and more people being offered remote working opportunities due to the pandemic. This trend is expected to calm over the next 12 months as the initial rush is over and a more modest rise of 5% is predicted.
Supply is still the main contributor to the current housing situation in Ireland. Despite the government’s efforts, we are still a long, long way from where we need to be, meaning that demand will continue to far outweigh supply over the next few years. This will inevitably continue to increase house prices nationally.
Construction
Supply is obviously a major factor in house prices, but last year saw another major blow to the construction industry thanks to the pandemic, in the form of site closures and staff shortages, compounded by increases in raw materials such as timber which saw an increase of up to 30% due to global supply chain issues. This increase wasn’t limited to timber and as a result, new builds, in particular, saw large increases in costs.
These supply chain issues are expected to be resolved over the coming months as supply chains get back to normal. It is hoped that prices will come down if not revert to original prices completely.
Commercial Property
The commercial sector saw a strong recovery last year with investment doubled from €1.8 billion in Q1-Q3 2020 to €3.5 billion for the same period in 2021. Nearly €800 million in property assets traded in Q3 alone, which is a 14% increase and 12% above the five-year average. The sector is poised to enjoy another strong year of growth as the pandemic subsides.
Outlook
Overall there are a lot of positive signs for the year ahead. Although there is always the possibility of unforeseen further lockdowns and other pandemic related issues, markets look strong and opportunities are there.
As usual, if there is anything we here at KPM group can help you with, please don’t hesitate to contact us and a member of staff will be happy to help in any way we can. Happy New Year again and we wish you all the best for the year to come.
