Monday 16th January, 2017           For immediate release

CSO HOUSE PRICES – PRICES WILL CONTINUE TO INCREASE PREDICT AUCTIONEERS

Responding to today’s CSO residential property prices for the year to November, showing a national price rise of 8.6pc with higher increases outside of Dublin, IPAV, the Institute of Professional Auctioneers & Valuers, said it expected this upward trajectory to continue until supply moves closer to demand.

Pat Davitt, Chief Executive of the organisation which represents 1,100 auctioneers, said:  “It is not at all surprising that prices outside of Dublin would be increasing, for example, a 16.7pc rise in the West, since prices have been very subdued in many parts of the country and little or no stock has been built because new homes cannot be built for the prices at which second hand homes have been selling.”

Mr Davitt pointed out the need for caution particularly when interpreting figures in relation to recovery from the trough in early 2013.  “These show a 50pc increase nationally with a 65.8pc increase in the Dublin area.  However, if a €400,000 home drops by 50pc to €200,000, to get from €200,000 back to €400,000 it would need to increase by 100pc.

“Despite protestations to the contrary it was the hype created by such recovery figures in 2014 that panicked the Central Bank into bringing in over-zealous mortgage lending rules at a time when there was no question of excessive lending.  The fact that the bank has had to rescind part of the rules is evidence that they were very excessive.”

He said mortgage lending rules do have a role when there is “a genuine risk of over-lending. However, such as situation did not exist in 2014 and it doesn’t exist now,” he said.  And he pointed out that property prices are still about one-third below peak.

Mr Davitt said the Government needs to address the lack of supply more urgently. “While lack of supply remains so stubborn prices will continue to increase.  Issues around building costs, cost of credit, planning and availability of sites remain to be tackled,” he said.

He also said the Government’s Help-to-Buy scheme “is most welcome to assist those in their 20s and 30s who have been forcefully and unfairly excluded from the market at a time when vulture funds have been facilitated in making a killing.”

“It will, in the short term, add to pressure on demand but unless the real impediments to supply are addressed we will continue to see a dysfunctional market,” he said.

Ends