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Property prices expected to rise by 2 percent this year

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By Ted Healy of DNG TED HEALY

It's that time of year again where property reports on the year past are plentiful, with financial institutions, agencies and construction firms all analysing the past 12 month's activity and making predictions for the year ahead.

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The latest report, from the Society of Chartered Surveyors (SCSI) has highlighted that in the final quarter of 2022, 40% of house sales were due to landlords exiting the market.

It suggests property prices are expected to rise by 2 percent this year, a considerable slowdown on the double-digit growth rates up to now which is likely to put a squeeze on house builders because construction costs are rising at more than 2 percent. This will directly impact on supply to the market.

The large numbers of buy-to-let properties being sold will not be replaced in the rental market, putting more pressure on rental costs.

The survey found that popular new three-bed semis remain out of the reach for a large number of first-time buyers on average salaries.

The trend of second-hand buy-to-let properties coming on the market was evident throughout 2022, but it ramped up in the last quarter of the year. While this may have helped to increase the number of properties available for sale – 66% of agents reported low stock levels this year – the lack of supply remains the dominant issue in the market.

The trend of private landlords exiting the market also has serious implications for the supply of rental properties. SCSI agents are reporting that the supply of available units to rent is at one of the lowest levels ever, and they do not believe the situation will improve in the short term.

“Almost 80% of agents surveyed are of the view that individual buy-to-let second-hand rental units being sold at present will not be replaced in the rental market in the next two years,” said John O’Sullivan of SCSI.

The survey found the three primary reasons for occupied residential units coming back on to the market for sale include the complex and restrictive nature of rent regulations, landlords finding compliance with rented housing standards too onerous, and net rental returns too low, according to the report.

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Is it a good time to sell your property?

By Ted Healy of DNG TED HEALY Recently published property outlooks are suggesting single digit growth in prices this year. The MyHome.ie quarterly report found the market had held up […]

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By Ted Healy of DNG TED HEALY

Recently published property outlooks are suggesting single digit growth in prices this year.

The MyHome.ie quarterly report found the market had held up better than evidence had suggested in 2022. The number of vendors cutting asking prices remained at low levels, while many house prices were being settled above asking prices.

However, the report warned that the resilience of the housing marking is set to be tested this year. It found annual asking price inflation slowed to six percent nationwide, meaning the asking price for the average home in Ireland is now €330,000.

There were 15,000 available properties for sale on MyHome.ie in the fourth quarter of the year – an improvement on the same time last year but still below pre-pandemic levels.

Average time to sale agreed was 2.7 months nationwide which the report said is indicative of a very tight housing market.

The report said it expects to see 28,400 house completions in 2022, exceeding its previous forecast of 26,500 finished units.

The author of the report, Conall MacCoille, Chief Economist at stockbrokers Davy, said it appeared the market had held up better than evidence had suggested.

“The number of vendors cutting their asking prices is still at low levels. Also, transactions in Q4 were still being settled above asking prices, indicative of a tight market,” he said.

Recent months had seen worrying trends in the homebuilding sector, with housing starts slowing, and the construction PMI survey pointing to the flow of new development drying up.

“We still expect housing completions will pick up to 28,400 in 2022 and 27,000 in 2023. However, the outlook for 2024 is far more uncertain. The Government’s ambitious plans to expedite planning processes are welcome although, as ever, the proof will be in the pudding,” he added.

Locally, and unsurprisingly, the lack of supply of new and second-hand properties remains the dominant issue. There has been very little new construction due largely to the rising cost of construction, labour, materials and utilities which in turn is putting pressure on the second hand market.

This market proved particularly strong in 2022 with active bidding experienced on the majority of house sales and a large proportion of guide prices being generally exceeded.

The detached family home end of the market is particularly strong with increased competition for a limited number of available well located family homes.

So, what lies ahead and is it a good time to sell your property?

The answer is a tight market with scarcity of supply being a factor. If selling now you will benefit greatly from a lack of supply of available homes (therefore less competition) provided your property is marketed correctly of course!

For anyone considering placing their property on the market, contact DNG Ted Healy 064 6639000 killarney@dng.ie for genuine honest advice on how to achieve the best possible price for your home.

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Tourism VAT rate should be “continued indefinitely”

A Kerry Fianna Fáil Councillor believes the current 9% tourism VAT rate should be continued indefinitely despite “the allegation that some hotels were not passing on the saving to its […]

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A Kerry Fianna Fáil Councillor believes the current 9% tourism VAT rate should be continued indefinitely despite “the allegation that some hotels were not passing on the saving to its customers”.

The reduced VAT rate of 9% was introduced by the Government in response to the challenges posed by COVID-19 to the hospitality sector.

“I believe a return to a 13.5% Tourism VAT rate would be counterproductive at this stage, to small and medium businesses that welcome visitors to our country and our county,” Councillor Michael Cahill said.

“Catered food is already charged at 13.5%, alcohol at 23% and accommodation presently at 9%. This sector is providing pretty decent returns to the Exchequer and should be supported. All parties in this debate, including the Government and accommodation providers, should review their position and ensure their actions do not contribute to ‘killing the Goose that laid the Golden Egg’.”

He explained that the tourism industry is “in a very volatile market”, as can be seen by the enormous challenges “posed by COVID-19 in recent years”.

“A grain of rice could tip the balance either way and great care must be taken not to damage it irreparably. We are all aware that the next six to 12 months will be extremely difficult for many businesses with the increase in the cost of oil and gas, etc,, and a return to the 13.5% VAT rate will, in my opinion, close many doors. If a minority are ‘price gouging’, then it should be possible to penalise them and continue to support the majority who offer value for money to our visitors.”

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