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Where will our next generation live?

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By Ted Healy of DNG TED HEALY

With planning permissions being overturned by An Bord Pleanála in the local news this week, it is interesting to note that it is estimated in excess of 50,000 housing units could be completed in the country in the two years to the end of 2023, according to the Banking and Payments Federation Ireland (BPFI).

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In its latest Housing Market Monitor, the BPFI said that it could help meet the demand for housing which is being driven by employment growth and rising incomes.

Estimates from various bodies say the industry needs to be completing between around 30,000 and 35,000 housing units per year to keep pace with demand and projected population increases.

Others argue that the figure is likely much higher when demand for rental accommodation and the trend towards smaller household composition is taken into account.

The Central Bank forecast earlier this year that 24,500 units would be completed this year - 29,000 in 2023 and 33,000 in 2024.

According to Brian Hayes, CEO of the BPFI, "The Irish banking sector has the capacity to provide further sustainable mortgage lending. Taking all factors into account however is it critical that housing supply needs to continue to increase in order to moderate house price increases and enhance affordability in the market.”

Residential property prices increased by just over 14% in the year to June, according to the Central Statistics Office (CSO), as the supply of properties continued to lag demand.

“The fundamental driver of the significant increase in average residential property prices in Ireland in recent years has been the lack of supply of new homes as opposed to lending growth, which was observed in mid-2000s," Ali Uğur, Chief Economist, Banking & Payments Federation Ireland, said.

He referenced Central Bank figures which showed that as of the end of 2021, over 45% of mortgage lending had been issued under lending rules introduced by the regulator in 2015 which restricted lending based on income and the value of the property.

So with national house building numbers on the rise, what about locally?

The recent An Bord Pleanála decision to refuse planning permission for the construction of a 228 unit development on Port Road has received a mixed reaction. A separate planning permission for a development of 30 units in Ballycasheen, Killarney, was overturned by the Bord earlier this year.

With little new home development on the horizon for Killarney being the net result, where are our next generation to live?

A shortage of available properties for sale, both new build and second hand, in the Killarney market has led to spiralling house prices. Now with no major increased supply expected in the short to medium term, prices can be expected to remain strong, despite forecasted interest rate increases.

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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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