Survey reveals expected rise in property prices this year

Munster is likely to see a smaller increase

Survey reveals expected rise in property prices this year

Photocall file photo

A new report says residential property prices are expected to increase by 8% in 2018.

The Society of Chartered Surveyors (SCSI) says they also expect rents to rise by 8%.

The survey predicts this, despite the introduction of rental caps in Dublin and Cork.

But it says there will be a slightly lower increase of property price for the Munster region, at 7%.

Some 92% of chartered surveyors say sellers' price expectations have increased, up from 86%.

Most surveyors believe the rental market "is in crisis" and that the rental cap has forced a significant number of landlords to exit the market.

Chartered surveyors in the Leinster region, excluding Dublin, are expecting the greatest increases across all housing unit types - with an increase of 10% projected for two-bed apartments and a rise of 9% for three-bed semis.

While 81% of surveyors reported an increase in tenant demand.

Source: SCSI

The price of residential development land rose by 14% in 2017 - and is expected to increase by a further 11% this year, it says.

Some 71% of chartered residential surveyors saw an increase in residential activity in 2017, up from 60% in 2016.

John O'Sullivan is from the SCSI's Residential Agency Group.

He said that while the forecast of 8% was probably on the conservative side, the figure was still too high and not sustainable in the long-term.

He said until the supply situation was addressed, competition among buyers, a rising population and continuing economic growth would see price increases continue.

"Surveyors around the country are hugely concerned at the low level of affordable housing which is being constructed for middle income earners.

"Many believe this is because it is simply not economically viable to build affordable new homes in urban areas, where demand is highest.

"While surveyors outside Dublin believe the ‘Help to Buy’ scheme is boosting supply by encouraging housing construction, those in Dublin believe it has had less of an impact.

"One of the main contributors to the cost of new housing, is the rising price of development land.

"Our report found the price of residential development land increased by 14% nationally in 2017 and predicts it will increase by a further 11% this year."