Despite headline figures, homes available for less than cost of building – IPAV

The slowing rate of increase in house prices is in line with what auctioneers throughout the country are reporting, according to the IPAV, (Institute of Professional Auctioneers and Valuers).

IPAV chief executive Pat Davitt, commenting on the CSO Residential Property Price Index for November, said: “There are geographical variations, some of a magnitude not seen before and arising from new working norms.

“While the west generally is showing a rise of 15.6pc, it should be remembered that the figure is coming from a low base price. The index is showing the median price of €125,000 for the Ballyhaunis area, a price at which it would be unviable to build a new home,” said Mr Davitt.

He said overall the figures point to a stabilisation in prices for the first quarter of this year at least.

The IPAV predict the number of sales this year is likely to be back to 2019 levels – when 45,276 purchases were filed with Revenue.

The institute say auctioneers are reporting that two in every four properties being sold are accounted for by private non-institutional landlords leaving the market, “arising from the constantly changing and challenging regulatory and taxation environment that treats private landlords differently from institutional landlords”.

Mr Davitt said areas in which the price of homes is below the cost of building them will not attract new builds while the situation maintains.

“Increasing interest rates and high levels of inflation in building costs are also having an effect, so, new measures being promised by the government are eagerly awaited – and the nature of those will dictate whether we move forward in terms of improving property supply and affordability.

“Maintaining the existing situation will, in effect, amount to a worsening of the housing crisis,” he warned.

The IPAV have called for mortgage terms to be extended for periods of up to 40 and 50 years to address the current situation where home ownership has effectively become the almost exclusive preserve of those on higher incomes.