Property: ‘It’s clear prices are only going to go one way’

Most of the Society of Chartered Surveyors Ireland’s agents (89%) expect property prices to rise in 2022.

On the other hand, just 9% expect prices to remain the same, while 2% expect a decrease.

In 2021, the respective figures were 68%, 24% and 8%. SCSI estate agents believe property prices in Connacht/Ulster will see an increase of 7%. 

The body is of the view that properties in Dublin, the rest of Leinster and Munster are set for a median increase of 5%.

80% of agents, who expect prices to rise, believe it is due to market factors such as the lack of supply of new and existing homes.

Furthermore, 13% attribute it to economic factors, while just 4% believe the Central Bank of Ireland’s macro-prudential rules are the “key” driver. 

Property prices 

This year’s SCSI annual Residential and Outlook report is based on three surveys of 580 members conducted over the last 12 months.  

President of the SCSI, TJ Cronin, said 2021 was when the lack of supply and Covid combined to “totally distort” the property market. As a result, this pushed up demand and inhibited the supply of new homes. 

He acknowledged that those issues would continue to “dominate” the market in 2022.

Despite this, he said the double-digit inflation Ireland experienced last year was “not sustainable”, and SCSI members believed the rate would “moderate”.

“Our survey shows the key factor affecting property prices all over the country is the low level of new housing supply,” he commented.

“In Q4 2021, 85% of agents reported having low levels of stock available for sale. In three surveys, that figure has not dropped below 81%.” 

“When you combine that lack of supply with the two other key issues identified by our members as affecting property prices – namely pent-up demand due to Covid and buyers having an enhanced level of savings due to the pandemic – it’s clear prices are only going to go one way.” 

Following lockdown three, he said they saw now that the market experienced “something of a frenzy” from April to July with competitive bidding and high sales prices pushing the annual inflation rate up to 14%.

“While this was good news for vendors, many well-funded buyers found themselves priced out of the market.” 

“Although the market slowed in Q4, our members are predicting a 3% increase in prices in the first quarter as new buyers come into the market.”

“They believe the rate of inflation will then moderate to a median of 5% nationally for the year. However, in Connacht/Ulster, where prices are comparatively lower, agents are predicting a 7% rise in prices.” 

House prices

According to the CSO, the median price of a home nationally is €275,000.

A 5% increase in this instance would translate to an increase of €13,750. On the other hand, a 7% increase would equate to an increase of €19,250.

With residential property completions only due to hit the 30,000 mark in 2023 – the SCSI estimates the country needs to be building 40,000 units per annum to meet demand.

Lower costs of new home constructions

Cronin said driving down the costs of new, well designed, sustainable homes would be “critical” to the Government’s Housing for All plan’s success.

“While the expected moderation in the rate of price increases for this year is welcome, the increases will heap further pressure on hard-pressed buyers seeking affordable homes.”

“At a time when material costs are rising sharply, it is particularly important that we do everything possible to lower the costs of new home construction by removing planning delays and addressing the procurement and infrastructure issues which are slowing the construction of critical housing projects.” 

“That is why it is so important that the government achieves the correct balance between different stakeholders when it introduces the Large-Scale Residential Developments system which replaces the Strategic Housing Development process.”

“While the new system will restore planning decision powers to local authorities, it must also establish mechanisms which facilitate the resolution of appeals in a more efficient and cost-effective manner.” 

• See more properties for sale.