UK residential property price growth slows down
UK Residential property price have increased by almost 4% in the year to March but the rate of growth is slowing down
Residential property prices have increased by almost 4% in the year to March across the country.
According to the Central Statistics Office, the prices of houses and apartments rose by 3.9% in the period – but the rate of growth is slowing down.
Prices in the 12 months to the end of February increased by 4.3%, while the increase in 12 months to end of March last year was 12.6%.
Homes in Dublin rose in price by 1.2% in the year to March, while prices across the rest of the country rose by 6.8%.
Overall house prices were up by 6.7% and apartment prices rose by 8.6%.
The index found that the price of homes are now 18.6% lower than the peak reached in 2007.
The Institute of Professional Auctioneers & Valuers (IPAV) said the slowing rate of price increases represented some realism returning to the market following a period of exuberant growth.
IPAV chief executive Pat Davitt said prices in many areas of the country were still below the cost of building and that the majority of houses purchased were existing dwellings, pointing to the difficulty of building new homes.
While Dublin is awash with international funds keen to build to rent and enjoy extremely favourable tax treatment, finance at reasonable rates of interest is still difficult if not impossible to get for SME builders wishing to build, Davitt said.
He said the Home Building Finance Ireland 750 million euro fund first announced in October 2017 was intended to target the SME building sector, but it’s still very unclear where it’s at or what interest rates will be applicable to its loans, when and if they emerge.
He added that overall the number of transactions in the market were still “abnormally low.”
Brokers Ireland said the further slowing in the rate of house prices increases in Dublin was welcome given how rapidly they had climbed, but that the drop in the number of new dwelling transacted in the year pointed to the nub of the housing crisis.
Diarmuid Kelly, chief executive of Brokers Ireland, said that demand for homes is estimated to be of the order of 35,000 every year, with only just over 18,000 built last year. [The CSO] figures show only 2,623 dwelling purchases were registered with Revenue in March, with a whopping 82.1% of these being existing dwellings and a mere 17.9%, less than one in five, being new dwellings.
He added that a market that cannot deliver new homes when demand is so strong with rental prices outstripping the costs of mortgage repayments in every area of the country, and substantially so in many areas, is still in deep trouble.