Residential property value rose by 5.2% in 2016

By Echo Reporter

Sherry FitzGerald, announced on Tuesday that the average value of residential property in Ireland rose by 1.2% in the fourth quarter of 2016, bringing growth in the year to 5.2%.

This represents a moderate increase on the 4.0% recorded in 2015. The Dublin market saw prices increase by 3.7% over the course of 2016, compared to 1.4% in 2015.

When Dublin is excluded from the national figure, the annual growth figure stood at 7.3% in the twelve months to the end of December 2016.

This growth rate was just slightly lower than the 7.6% recorded in 2015. The regional centres of Cork, Galway and Limerick saw growth of 7.4%, 10.1% and 6.9% respectively in the twelve month period.

Commenting on the results Marian Finnegan, Chief Economist, Sherry FitzGerald Group said; “The combination of the strengthening demand and limited supply has placed upward pressure on prices.

This is most noticeable in rural Ireland with counties like Donegal, Offaly, Roscommon, Westmeath and Wexford all experiencing double digit growth. That said, it should be noted that average values still remain approximately 40% off peak 2006 levels.”

Commenting further on the market Ms Finnegan said; “There is no doubt that 2016 was a turning point for the residential market. Ten years after the crash began, the announcement of the Government’s Action Plan for Housing and Homelessness during the summer of 2016 provided a vision for housing, together with a clear strategy on how the vision will be achieved.

“The combination of this strategy and the revised macro prudential policy and the initiative for first time buyers launched in the Budget will all serve to assist the market in its recovery.”

Continuing Ms Finnegan said; “However, despite the considerable progress made earlier in the year to restore confidence in the construction sector, the announcement of the Government’s plan for the rental sector in December was disappointing.

“There is undoubtedly clear evidence that current levels of rental inflation are a direct market response to inadequate supply levels and yet the Government plan does not address this at all.

Instead it focussed on capping rental inflation to 4% in key urban areas. This short-term approach was particularly disappointing as rental levels are now exceeding previous peaks in many urban centres”