The Irish property market is a mess and Brexit is about to make it worse

Ireland can't pick up jobs from companies fleeing London if there's nowhere for people to live...

The Irish property market is a mess and Brexit is about to make it worse

A collection of estate agents' boards offers properties 'for sale' and 'to let' outside residential housing in Dublin | Image: Aidan Crawley/Bloomberg via Getty Images

Sherry FitzGerald has announced that the average price of properties in Ireland rose by 1.4% in the second quarter of 2016.

Prices in the first six months of the year rose by 2.7% down from an increase of 2.8% in the same period in the previous year.

The estate agent adds that the supply shortage in the Irish market has not been addressed, Marian Finnegan, Chief Economist Sherry FitzGerald said the country has a "deep supply side crisis."

"The level of price inflation in the opening half of the year was largely consistent with the same period in 2015, however this is not a reflection of stability in the market place," she added.

The analysis notes that record-high rents are adding to the stress on the markets:

"The crisis in the housing market has deepened and this is placing a significant burden on our competitiveness, with rising rents in particular damaging the viability of our cities for foreign direct investment.  At this juncture, it is vital that our new Minister addresses the barriers to activity and development in the market and seeks to halt the loss of essential rental accommodation," the economist wrote.

Ms Finnegan adds that as companies access their future plans in-light of the UK's decision to leave the EU - high rents and a lack of housing supply is going to affect Ireland's competitiveness:

"Brexit will undoubtedly bring challenges for the Irish economy in so many ways, however, it also poses a challenge for the housing market. There is a growing view that Brexit may lead to an uplift in occupier demand from the foreign direct investment sector. In particular Dublin is likely to benefit from increased demand from financial services companies in need of an EU base.

"This will lead to a further increased demand for housing. With this in mind, it is imperative that the Government takes immediate action to remove the barriers to both construction and activity to allow a more normal functioning and responsive market re-emerge."

Prices outside of Dublin continue to increase at a faster pace than the capital - prices in the rest of the country rose by 4%.