Estate agents expect property prices to continue to increase, but say the rate of the rise will slow down.
Properties will rise in cost by an average 3% over the next three months and by 4% over the next year, according to the latest Residential Property Market Monitor from the Society of Chartered Surveyors Ireland.
This is a drop from the initial post-pandemic surge, which saw annual rates of house price inflation soar as high as 15%.
However, although the increases are slowing, prices have jumped by 118% from their trough in early 2013, the society said.
John O’Sullivan, chairman of the society’s practice and policy committee, said: ‘These figures show that buying an affordable property remains out of reach for thousands of Irish people on average salaries looking to buy their first home. Of course, you are also going to have thousands of people on salaries below this level.
‘Unfortunately, with construction costs continuing to spiral and interest rate increases on the way it looks as if the situation facing first-time buyers is set to become even more challenging. From a homebuilder’s perspective, if people can’t afford new homes that raises questions over their viability and overall housing supply.’
He said builders had limited control over global supply chain issues and the cost of imported materials.
However, he said the Government did have control over issues such as planning, procurement, utility connection charges, VAT, and development contributions.
‘We know from previous SCSI reports that these soft costs make up around half the cost of delivering a new home and these are the areas the Government and local authorities need to focus on if we want to reduce the costs of delivering new homes,’ he said.
In the rental sector, like sales, the report stated that lack of supply remains a major issue.
The society said agents did not expect much new stock to come onto the rental market for at least two years.
They said the top reason landlords are leaving the rental market is the complexity of rental legislation and regulations.