Housing economists have their work cut out for them right now. Property consumers are not behaving as expected, and this poses certain problems when it comes to forecasting market trends.
The most recently issued property price report from REA estate agents shows some interesting shifts that were speculated about, but not entirely predicted; namely, Cahir in County Tipperary has emerged as the town with Ireland’s fastest-growing house prices. Three-bed semi-detached homes in that town have jumped a massive 23.2 percent over a 12-month period. Why? Housing affordability issues in and around the capital, better road infrastructure nationwide, improved rural broadband, remote and hybrid working opportunities, chronically low housing stock levels, stricter lending rules, and a general weariness of people with ‘busyness as usual’ that seems to have come to a violent head over the past 18 months. The people have had enough.
So what comes next for Ireland’s housing market? Property prices in central Dublin have fallen, while double-digit growth has been seen in Glenageary, South County Dublin, as well as in Skibbereen, New Ross and Athy. It is difficult to draw any conclusions here as some of these areas are growing from a markedly low base, while others are well-established as property hotspots. On average, Irish property prices rose by 6.9 percent from summer 2020, to summer 2021, with Dublin prices up by 6.4 percent and prices outside Dublin up by 7.4 percent – but the average figures are masking some remarkable differences across the country. In fact, the price hikes are such that the State has issued a warning to homeowners not to undervalue their homes when making property tax returns (with a gentle reminder that Revenue has the power and the tools to double-check the value of homes). Also, in a similar vein, the Residential Tenancies Board (RTB) ‘vows to go after landlords after rent rises exceed legal caps’, as reported in the Irish Independent this week.
The past decade has shown just how little diversity we have in the Irish housing marketplace and that needs to change. Students ought not to be competing with professional tenants, and professional tenants ought not to be competing with the local authorities for suitable rental homes. Similarly, first-time home buyers, institutional investors and the State ought not be competing for the same stock of private homes, irrespective of whether those homes are houses or apartments. Yet, new tenures of housing, including long-term leasing, co-living and dedicated BTR, are being resisted. There is a very real lack of understanding about how real estate of all types gets delivered and the most frustrating aspect is that Housing for All depends upon successful delivery by all. If there was only one right solution to the housing crisis, it would be much easier to agree on it. But this is not the case. The crisis is multifaceted and, as such, requires a multifaceted approach to tackling it. Is a Berlin-like referendum on the cards for Ireland? Let’s hope not..
Lotus Investment Group