Property prices on the rise, but supply still low in Limerick

Homes needed to meet demand and prevent a new property bubble

Anne Sheridan

Reporter:

Anne Sheridan

 Property prices on the rise, but supply still low in Limerick

Glebe House in Adare remains for sale for €795,000

HOUSE prices in county Limerick have risen by nearly eight per cent in the year past, with a 14% increase witnessed in the city.

Limerick saw the fifth highest number of house sales in the country in 2016, but thousands more are needed to meet demand and prevent a new property bubble, local auctioneers have warned.

From the last quarter in 2015 up to the last quarter of 2016, prices in Limerick city rose by 14%, up to €165,586, and in the county, to €156,371, up 7.6%.

From its trough, there has been an 18.8% increase in county Limerick while in the city, prices have risen by 39.4% since the market bottomed out.

The latest report from the property website Daft.ie states that in comparison to a year ago, prices in Munster are 10% higher - with the largest gains in Limerick and Waterford cities, and the smallest in county Tipperary.

There were fewer than 7,800 properties on the market in Munster in December, the lowest availability since the first quarter of 2007.

Almost half of all properties in Munster find a buyer within four months, up slightly on 47% 12 months ago.

The average transaction price in Munster is now 0.4% above the original list price, compared to 0.9% a year ago.

There are now just over 1,000 properties for sale in Limerick on Daft.ie, and nearly 800 of those are priced under €200,000.

Nationally, the average price rose by eight per cent in 2016, similar to the 8.5% seen in 2015.

“Ireland is currently trapped in a situation where housing prices are increasing far faster than prices in the rest of the economy.

“This is not sustainable but the latest indications are that this high rate of inflation is embedded in the market, due to strong demand and weak supply,” said Ronan Lyons, author of the report and assistant professor in economics at Trinity College Dublin.

Dublin and Wicklow remain the most expensive areas to buy a house, while the cheapest areas to buy in Ireland are in Longford, Leitrim, Sligo and Roscommon.

Meanwhile, a house price survey from MyHome.ie in association with Davy, anticipates that house price inflation is set to accelerate this year to 8% driven by the economic recovery and an ever tightening housing market.

However, the report warns that the combined impact of the Help-to-Buy scheme and looser lending rules means that double-digit house price inflation is a distinct possibility in 2017.

In Limerick, they found that the price of the most popular house type, the three-bed semi, rose by 3.45% in the last quarter of the year to €150,000. 

The median asking price across all property types in Limerick city was up 3.7% to €140,000 in the last quarter, while the annual figure across the county as a whole was up 10.4% to €149,000.

“The Help-to-Buy scheme – providing a tax rebate worth 5% of the purchase price of newly-built homes to first-time buyers – will add fuel to the fire,”said Conall MacCoille, chief economist at Davy, and author of the report.