House supply impacting price

House supply impacting price

In Leinster (excluding Dublin), price expectations from house sellers are likely to remain the number one factor for houses failing to sell in 2019, according to the latest research from the Society of Chartered Surveyors Ireland (SCSI).

Price expectations are cited as the number one reason for properties failing to sell, ahead of concerns following building surveys and mortgage issues.

The SCSI’s Annual Residential Property Review and Outlook report reveals that estate agents across the country believe that demand will increase across all property types with national house prices anticipated to increase by 4% in 2019 which mirrors that of the rest of Leinster.

This is down from the 8% prediction by SCSI agents 12 months ago.

Interestingly, official CSO results released year-to-date end of November show actual national price increases of 8%.

Agents expect to see the highest demand for new 2-bedroom apartments with predicted increases in excess of 5%.

The majority (80%) of agents reported an increase in vendor price expectations – this is down slightly from last year’s 96% Leinster average.

Aine Myler, SCSI Director General said that whilst the market remains in good health, sales in 2018 were still taking just over five months to complete, and many were still falling through:

“Homeowners and prospective buyers alike are keen to make the sale happen and move into their next property.

“The challenge for estate agents is managing some vendors’ excessive price expectations. Whilst we predict continued house price inflation on average this year, this is likely to remain in single digits.”

Aine Myler continued, “For the market to operate efficiently, we need a regular turnover of sales to help purchasers and sellers to keep moving up and down the ladder.

“Potentially unrealistic asking prices can leave all parties disappointed, curtailing market movement when it’s needed most and as affordability limits kick in.”

Loman Dempsey, SCSI Agent and Managing Director of Loman Dempsey Property Consultants said that,

“The residential property market in the region continues to improve steadily each year.

“New housing completions are up by over 250% (albeit from a low base) in the past 4 years.

“As demand for more affordable housing outside of the city increases, almost half (45%) of agents in the region are expecting to market new homes for sale in 2019”.

An increase in new builds to market was ranked No. 1 by 33% of agents and ranked in the top 3 by 68% of agents as a key factor impacting on the supply of second-hand units in the market.

Significantly, Landlords exiting the rental sector, also ranked in the top three (59%).

In the residential lettings sector, rents are expected to rise by an average of over 6% across all segments in Leinster, ranging from 6% for 4-5 bed detached houses to 7% for 3-bed-semi-detached houses.

Most agents expect demand for rental properties to exceed supply in 2019.

Over 486 Estate agents, Auctioneers and Chartered Surveyors around the country took part in the survey in late November/early December 2018.