Hikes in house prices spread outside Dublin

You're going to have to travel farther and farther outside the commuter belt to get a decent deal...

Hikes in house prices spread outside Dublin

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The Leinster region outside of Dublin will experience double-digit percentage increases to house and apartment prices over the year ahead, as demand pushes people farther from the capital.

The price of a one or two-bed apartment should jump 11% and climb 10.6% for a three-bed semi in those areas, according to the annual residential property report from the Society of Chartered Surveyors Ireland (SCSI).

In Dublin, a three-bed semi will be 9.5% more expensive, just 0.1% above the national rate of increase.

Across all types of housing in Ireland, the SCSI expects residential property prices to rise by 7%. Surveyors cited the 'help-to-buy' scheme and the loosening of the Central Bank's lending rules as key reasons behind the hikes.

Rental market at 'crisis point'

When it comes to rent, the report forecasts an increase of between 8-10% outside the agreed rent control areas in Dublin and Cork, where increases are capped at 4%.

The SCSI called the controls "the most negative measure for rental supply in the year ahead".

Ronan O’Hara, chair of the SCSI’s Residential Agency Group, told Breakfast Business:

"Our concern is that a lot of guys who have buy-to-lets or are investors are going to exit the market. If they put their homes on the market... in nearly nine out of 10 cases, owner-occupiers are buying those properties so they're not going back into the rental market. So the supply is just going to get squeezed even further. That would be our big concern."

"The rental market at the moment is already at crisis point and we just think it's going to get worse now with these rent controls because there's no incentive for landlords to continue in this market..."

Elsewhere, the effects of Brexit are being felt prematurely. 

"Four out of five of our surveyors –78% – feel that it's already had a negative effect on values in their area," O'Hara said.

He attributed this to a slowdown in the number of ex-pats who were returning to Ireland to take advantage of cheaper properties when sterling was stronger. Additionally, a majority of SCSI members anticipate that more countries will follow the UK's lead and leave the EU over the next three years.