A decline in the number of homes changing hands has failed to stem the tide of rising prices this year so far with the number of second-hand homes for sale declining to new lows, according to two new industry reports.
In its latest residential buildings report published on Wednesday, property database GeoDirectory said the total number of residential property transactions in the Republic had slumped by 5.8 per cent to 47,686 in the 12 months to the end of May. Yet, the national average house price had increased by 4.3 per cent to €381,749 over the same period with prices up in every county in the Republic except Monaghan.
Meanwhile, new data from MyHome.ie underlined the ongoing stalemate in the second-hand home market.
[ Mover mortgage approvals decline in May amid shortage of second-hand homesOpens in new window ]
The property listing website, which is owned by The Irish Times, said the number of second-hand units on the market at the end of July was 12,477, down by more than 5 per cent over 12 months. Second-hand stock has declined by 50 per cent in a decade, according to the website’s analysis, compared with 24,750 in July 2014.
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Joanne Geary, managing director of MyHome.ie, said the analysis “highlights the scale of the shortfall in second-hand properties” and “emphasises the work that needs to be done to address the imbalance between supply and demand” in the wider housing market.
“This trend is particularly concerning when one considers that, according to the CSO [Central Statistics Office], the population of the country has grown by an average of 65,000 every year since 2016,” she said.
Figures from the Banking and Payments Federation of Ireland (BPFI) have underlined the scale of the problem this year. Drawdowns of mover mortgages – loans to homeowners who already own a property and are looking to buy and move into a different home – declined by 3.1 per cent in volume terms in the three months to the end of June compared with the same period last year, the lobby group said last week.
[ Home prices still climbing as housing shortage continuesOpens in new window ]
“There is a vicious circle in the market at present, whereby those looking to trade up or down appear to have been spooked by the lack of stock available and are delaying a sale as a result, leading to an overall and consistent reduction in supply,” said Ms Geary. Demand for housing has been buttressed by the strength of the economy, she said. “Added to that, looser lending rules and demand-led government initiatives such as the First Home Scheme and Help-to-Buy Scheme have also strengthened demand.”
Meanwhile, GeoDirectory said the Republic’s total housing stock stood at more than 2.15 million at the end of June with 31,384 new addresses added to the database in the 12 months to the end of June. This represented a 17.1 per cent increase in the number of new address points from the second quarter of last year.
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The number of new buildings under construction fell 4.3 per cent over the 12 months, GeoDirectory said, with housing commencements up a 86.4 per cent over the same period.
Dara Keogh, chief executive of GeoDirectory, said the scale of the increase was significant, “which combined with the number of buildings under construction, suggests a strong performance in terms of housing delivery for 2024″.
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