House prices nationwide are likely to rise 5% in 2022, according to a new report from the Society of Chartered Surveyors of Ireland (SCSI). A new report released this morning says that most of the country will see an average price increase of 5%, while Connacht/Ulster will see a sharper raise, where a 7% increase is expected.
Nine out of 10 SCSI real estate agents believe home prices will get higher this year, and the majority of these think that it will be due to market factors, including a lack of supply of new and existing homes.
“Our survey shows the key factor affecting property prices all over the country is the low level of new housing supply. In Q4 2021 85% of agents reported having low levels of stock available for sale,” said TJ Cronin, the President of the SCSI.
“When you combine that lack of supply with the two other key issues identified by our members as affecting property prices – namely pent-up demand due to Covid and buyers having an enhanced level of savings due to the pandemic – it’s clear prices are only going to go one way.”
While the housing market did slow down in the last quarter of 2021, we expect the bulk of the price will increase in 2022 to occur in the first quarter of 2022. Cronin said
“Although the market slowed in Q4 our members are predicting a 3% increase in prices in the first quarter as new buyers come into the market. They believe the rate of inflation will then moderate to a median of 5% nationally for the year.”
“However, in Connacht/Ulster where prices are comparatively lower, agents are predicting a 7% rise in prices.”
According to the Central Statistics Office, The median price of a home nationally is €275,000. Increasing that by 5% translates to €13,750, leading to a final cost of €288,750. In Dublin, the average cost of a house is €400,000, meaning a 5% increase would equate to €20,000. This would see the average house price in Dublin increase to €420,000.
In its report, the SCSI estimates that 40,000 homes need to be built each year to meet the current demand for housing, despite residential property completions only set to hit 30,000 in 2023.
Cronin said that to meet the demand, the cost of building homes must be reduced, and pointed to research carried out by the SCSI that delays caused by judicial reviews can add between €8,000 and €12,000 to the cost of each individual unit.