And in his commentary accompanying the IBF Housing Market Monitor, Goodbody Chief Economist, Dermot OLeary, states that, while nationally we have an oversupply of housing units, a shortage of appropriate family homes is becoming increasingly clear in Dublin.
Drawing on various published data on the residential housing market to provide a composite analysis on where the market may be going, the IBF Housing Market Monitor shows that, while the number of properties listed for sale during Q1 2013 fell 15% compared to the previous year, there were 14% more property transactions over the same period. In fact, this is the sixth consecutive quarter of year-on-year growth in the volume of transactions. At the same time, property prices continue to show signs of stabilisation, with the national change in prices being -3% in Q1 2013 compared to the same quarter in 2012. Dublin property prices have seen their first year-on-year gain since Q3 2007 with prices 1.4% higher than a year ago.
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Analysing a range of statistics under the three key headings of housing supply, housing prices and housing transactions, and assessing these on a composite basis, Dermot O'Leary concluded that the mortgage market experienced in the first months of 2013 a 'hangover' from the ending of mortgage interest relief at the end of 2012. Given that mortgage drawdown activity was undoubtedly brought forward from Q1 2013 into Q4 2012 as a result, he believes it's best to look at the two quarters together. On that basis, mortgage drawdowns were actually up by 36% relative to the same two quarters a year earlier he states.
He said: "In contrast to the fall in mortgages drawn down, the number of property transactions increased by 14% in Q1… While one interpretation of this may be that credit is not available in the banking system, another is that buyers are using cash to invest in the Irish property market given the superior returns relative to ever-shrinking deposit rates in the Irish banks. Either way, it is a vote of confidence that buyers are willing to dip their toes into the Irish housing market at current valuations."
(CD/IT)
