House prices in Ireland are forecast to rise at the highest rate of any of the European countries examined by the ratings agency Standard & Poor’s over the next 2 years. S&P is forecasting price rises of 8.5% in 2017 followed by 7.0% in 2018.
A report issued by Daft.ie found that house prices in Ireland have risen more in the first six months of 2017 than in the whole of last year. In June the average list price of a house was 8.8 % higher than in December. The report warned that house prices will continue to rise for the next five to 10 years unless drastic action is taken.
Dublin will continue to drift upwards at a faster rate than the rest of the country. Economic recovery and the Brexit-related relocation to Ireland of some of London’s financial sector will ensure that house prices continue to increase as demand heavily outweighs supply.
Construction groups, such as the Construction Industry Federation, say it is not financially attractive to build on a large scale and have lobbied for budgetary measures, such as incentives and VAT cuts, to help address the issue of supply. Meanwhile, the Government has ordered an investigation into the cost of building homes across Europe because it does not accept claims that developers need more State money to help solve the housing crisis.
In Limerick, predictions see increases of 10pc on average in the next year, with one of the biggest increases of 19pc expected in three-bed semi-detached houses which are in very short supply. With no new significant buildings happening in the city to address the demand prices can only continue go one way – for now.