Property prices will continue to see sustained growth for the foreseeable future driven by record employment, a thriving economy and population expansion, according to a new report released today.
Estate agents Hooke & MacDonald forecast 13 per cent house price growh nationally and 14 per cent in Dublin in 2006. This will be followed 9 per cent growth nationally in 2007 and 7 per cent in 2008, as well as growth of 10 per cent and 8 per cent in the same years in Dublin, the report forecasts.
The increased numbers of migrant workers arriving in Ireland is underpinning demand for rental accommodation, while foreign nationals will account for an increasing proportion of buyers in the coming years, the report added.
First-time buyers account for 48 per cent of purchasers, followed by other owner-occupiers (24 per cent) and investors (28 per cent).
The estate agents forecast demand for new homes nationally to rise from 92,000 units in 2006 to 101,000 in 2008.
But the report warns that supply is failing to meet the required demand.
"A serious supply crisis is developing in Dublin caused by planning difficulties at local authority and An Bord Pleanála levels," the report said.
"During 2005 the number of units granted planning permission in Dublin dropped by a massive 45 per cent, from 24,196 in 2004 to just 13,233 last year, and the number of new home starts/registrations fell by 16 per cent. The biggest shortfalls are in Dublin city centre and south Dublin."
Hooke & MacDonald estimate there is only enough land in Dublin city centre, between the canals, for another six years' housing supply based on current planning policies.
Cork is set for a period of rapid expansion, according to the report, with a record 10,000 new homes built in the city and county this year, while completions will reach 5,000 in Galway and 3,000 in Limerick.
