Recently released at the beginning of July 2018 was the housing price report for Q2. Though little differences appear on the surface, there are few small signs signaling a positive overall change in the market.
Home sale prices are currently up when compared to those of just three months to a year previous. This statistic is proven accurate for nearly all parts of the country, that is, with Donegal being an exception. Donegal typically is the outlier of the counties as Brexit is being found to have a strong impact on their housing market.
Because the housing market is still showing sign of increased demand coinciding with a weak development of new homes, it is predicted that the prices will continue to grow. However, with this most recent report from draft.ie, we see that the overall trend may be slowly changing as prices are only 5.6% higher than the current 0% inflation, being the lowest rate of inflation reported in nearly four years.
The last time Ireland has seen a similar situation to the one currently facing the economy was over a decade ago.
Then, however, by 2007, we were seeing a dramatic fall in prices over the coming years due to the inevitable collapse of the credit bubble.
It is reported though, that this time, with the circumstances similar to what they were years before, a different ending is expected. This is because the central bank has since put in place rules that have dramatically reduced the impact of the very most volatile parts of the house price equation.
With these new central bank rules put in place, the normal “asset” factors are not to blame for the decrease in inflation we are seeing. The only possible cause for this trend is the ordinary supply and demand of consumers in the market.
The direction we are seeing being acquired in the sales market is not taking over the rental market as well as there remains a declining supply of supply for housing properties.
In the recent months, there has been a recorded jump in housing demand as the recorded numbers of homes on the market have reached the highest in months. It is too soon to say that a trend is emerging but this is a good sign for the overall development of the housing market.
With many new programs being put into place to increase housing and attempt for supply to begin matching demand, it is reasonable that for as long as demand stays relatively stagnant, we will begin seeing an increase in housing within the Ireland region.
Currently, the country is in need of approximately 40,000 new homes to be built in order to satisfy the demand of the consumers. This number including the various types of homes, social and rental, it is likely the increase in home development will become more moderate in the upcoming years.
