Sunday Independent Article https://bit.ly/2DYzmUu
What will affect property prices during 2019, will depend on the outcome of Brexit, whether there is an general election and also Government responses to the rental crisis.
In 2017, many thought we were heading for another Property Price boom but during 2018 there has been evidence that Property Prices are stabilising or at least the rate at which prices are rising has slowed. In Dublin the rate of increase has dropped to 8% and is predicted to drop further in 2019 to 5% or 6%. For more expensive houses, prices in the capital are expected to fall.
The slowdown in prices is generally attributed to Central Bank of Ireland (CBI) rules on Mortgage lending, which is restricting the amount that people can borrow. There are exceptions allowed but each institution has a quota for exceptions, and with some people being approved for exceptions with more than one bank, some banks were closed for exceptions from July. This is currently under review by CBI.
An increase in supply of new properties has also helped, however most new builds in the Capital are at the higher end of the market, which is out of reach for first-time buyers and those on lower incomes. While there is a lot of supply at some points, supply needs at other points are not being addressed. Some feel that demand may have plateaued or even peaked and it is expected that supply and demand will come into balance in 2022 or 2023.
Outside of Dublin it is a very different story and prices continue to soar, especially in areas with good transport links to the Capital. Prices also continue to rise in other cities such as Cork and Galway.
The Rental Market is going to affect property prices into 2019 and beyond and despite the introduction of Rent Pressure Zones two years ago, the increase in rental prices shows no sign of abating. The number of families applying for Housing Assistance Payment (HAP), continues to rise. There is still a large number of family homes and Buy-to-Let properties in arrears with the Banks for over 2 years . As the issue of arrears resolution comes to a head, the Banks will sell off more properties to vulture funds. As these properties eventually come to market there will be a falloff in the number of properties available to rent.
Concerns about Brexit have stalled prices in border counties and if there is a general election called this will also put a pause on the market. The CSO has taken over the calculation of house completions, which will give more accurate figures to forecasters. The impact of Brexit, the possibility of a general election and how the Government will respond to the rent crisis are all unknowns and it remains to be seen how these factors will affect the market.