IPAV chief warns of property market crisis
• Mullingar auctioneer worried about shortage of rental accommodation as students return to college
Auctioneers have called for the setting up of a dedicated property council to oversee the future of the property industry in Ireland.
Pat Davitt, chief executive of the Institute of Professional Auctioneers and Valuers (IPAV), made the call as a major crisis looms in the shortage of rental accommodation, particularly in Dublin.
Over the next few weeks thousands of students are set to arrive in the capital and major cities where there is a severe shortfall of accommodation in many areas.
“This is a crisis waiting to erupt with many students being either unable to find or to afford any kind of accommodation in the weeks and months ahead,” he said.
Mr Davitt pointed to the recent report by property portal Daft.ie report which showed a 43% fall in the number of available properties to rent in Dublin. There were a total of 2,394 properties available for rent at the start of August, compared to 4,212 at the beginning of August 2012.
Other cities outside Dublin have also seen a combined 27% fall in the number of properties available to rent during the last 12 months.
As a result Mr Davitt said, students looking to rent accommodation near Dublin colleges face a 7% increase in prices from a year ago and this is likely to increase further in the coming weeks.
The IPAV CEO said the shortage of accommodation was due in part to the recession, whereby people who would normally have purchased homes were unable to do so and were continuing to rent. He said the shortage was exacerbated by the recently introduced building regulations which outlawed traditional bedsits without providing any alternative accommodation.
“One of the legacies of the boom era is the regional mismatch between housing supply and demand,” said Mr Davitt.
“Some parts of the country will be continuing to try to absorb excess supply for some time to come whereas other areas such as Dublin are already showing signs of a shortage of supply. It is clearly now time to start building again in certain areas of Dublin to meet the heavy demand and to prevent rents spiralling out of control.”
Mr Davitt said one lesson that has been learned from the recession is that in modern, sophisticated society, you cannot have a totally free market and some degree of monitoring and intervention is required from time to time.
He said last spring that NAMA had announced it is sponsoring a major piece of research by the Economic and Social Research Institute (ESRI) which would produce a comprehensive report on the residential property market in Ireland. This is to include key factors influencing the availability of housing over the medium and long term.
He said such a report would provide the genesis for the establishment of a national property council, comprising experts from relevant fields across the industry who would advise the minister and government of the day on likely trends as they occurred.
“The actions of such a body could keep close tabs on the future direction of the property industry and help to avoid acute spikes and drops,” he added.
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