Earlier in the year, we discussed how house prices were predicted to rise by up to 6% in 2021. Well, it’s only September and already prices have risen by an average of 9% in what has been called an ‘Aggressive’ market, with prices outside Dublin rising faster than in the city. Will it continue to rise or is the bubble about to burst?
Supply
The biggest issue facing the Irish housing sector has been and still is supply. With just 27,000 properties due for completion this year – according to the Banking & Payments Federation Ireland (BPFI) – we are still a way off the minimum of 30,000 needed to meet the demand. As a result, there seems to be no sign of prices coming down or even levelling off
Recently the Government announced the Housing for all plan which promises to build 310,000 new homes and end homelessness by 2030. While this all seems very optimistic, some are sceptical about whether or not the government can deliver. Ninety thousand of these homes will be for social housing along with 53,800 affordable and cost rental homes and 170,550 privately-owned or rented.
While this is all great news for home buyers and renters, what does it mean for investors and landlords out there? Well, not much looks to change in the short term anyway. Regardless of this plan by the government, it will still take years before supply can meet the demand. Due to this, we expect to see a steady increase in house prices across the country for the foreseeable future.
Outlook
Current prices are on average 25% below the Celtic Tiger era levels of madness, so there is still plenty of room for growth in the current market. The rising costs of building materials, particularly timber has also contributed to the rise in house prices and is set to continue also. The global pandemic has hit supply routes and also a noticeable shortfall in skilled labourers and tradesmen have all had their own effect on the market.
There are many factors that point to further increases in property value over the next few years and very few pointed to the alternative. It would seem investing in property is as safe a bet as ever in Ireland.
Property Management Company
Should you need any advice or are considering an investment in Ireland, contact us here at KPM Group and see how we can help. We have over 25 Years of experience in property management in Ireland and manage several large scale developments as well as hundreds of residential properties across the country. Contact us today to see how we can help you maximise your return on investment.
