House prices to eclipse Celtic Tiger levels as 'generation rent is stripped of chance to own home'
From their lowest point since the Celtic Tiger era house prices have more than doubled since 2013, rising 114%. Picture: PA
House prices are set to surge beyond Celtic Tiger levels this year, with "generation rent" to be denied the opportunity of homeownership for the foreseeable future.
Industry figures have warned house prices will continue to grow at a double-digit rate, as high as 20% in some forecasts, following a report by the Central Statistics Office (CSO) showing prices rising at a speed not seen in almost seven years.
Separately, new research from Focus Ireland points to thousands of people at the “tipping point” of homelessness in what the charity says is Western Europe's worst-regulated rental sector.
The CSO’s latest Property Price Index said house prices had risen 14.4% nationally in 2021, and are now just 4% off Celtic Tiger highs in 2007.
From their lowest point in 2013, prices have more than doubled, rising 114%.
The average price of a home in Cork’s southside is over €340,000, with an average price of €290,000 across the county as a whole.
The third most expensive place in the country to buy outside Dublin is Kinsale, with an average price of €432,819.
The most expensive eircode in the country is Dublin 4, with an average price of €891,965. This was followed by Glenageary at €832,746 and Dublin 6 at €819,522.
The least expensive eircode to buy a house in is H23 Clones at an average of €104,471.
Housing expert and architect Mel Reynolds said that continuing low interest rates, combined with a sharp rise in savings built up by some during the pandemic, is pointing towards house prices going even higher in 2022.
“You could see prices rise 20% this year. The dynamic is clearly towards prices going up," he said.
Mr Reynolds said the actual number of homes sold to owner-occupiers has dropped slightly since 2017, as more and more homes are bought by investment funds, local authorities and approved housing bodies.
“In most locations, it’s cheaper to buy than rent, but many people can’t afford the deposit or get a mortgage,” he said.
“It’s a bit like a life raft. Your outgoings on a mortgage would be less than your rent. But, for many, they need to lengthen that ladder to get on the raft.”
Austin Hughes, chief economist with KBC Bank, said property prices will continue to rise throughout the year, but there could be signs of a slowdown in price increases in the second half of the year.
He said increased supply, an increase in ECB interest rates and cooling demand after a late surge last year, could temper the double-digit growth.
“It’s not going to slow dramatically,” he said. “It’ll be a limited and a bumpy slowdown.”
Brokers Ireland said the current situation is “largely confining homeownership to the better off or those with family support”.
Labour’s housing spokesperson Rebecca Moynihan said an entire generation is being denied the opportunity to aspire to homeownership.
“The average price of buying a home in Dublin is €405,500 meaning that ordinary workers are now entirely priced out of the city,” she said.
Meanwhile, new research from Queen’s University Belfast has suggested that the number of households in the rental sector with children has surged by 272% among couples and by 137% among lone parents with children.
It also notes that “generation rent” is increasingly drawn from middle-income earners who’ve been pushed to the rental sector as they are unable to afford a home.
Focus Ireland’s director of advocacy Mike Allen said these findings show how “stark and prolonged the rental crisis is”.
