A period of high price inflation appears to be drawing to a close and the property market looks set for a period of price stabilisation as we head into a new decade.
This is according to the Society of Chartered Surveyors Ireland (SCSI), whose members believe Munster property prices will rise by 3% in 2020, with rents expected to rise by 5%.
Chartered agents and auctioneers in the province say the price stabilisation is being driven by more realistic price expectations, affordability constraints and increased supply in some urban areas.
According to the SCSI’s annual Residential and Outlook report, which has been running since 1983, the number of chartered agents who said sellers’ price expectations have increased, halved from 80% to 40%.
Agents working in the Munster region reported that 2019 was stable with increased activity in the first half of the year but that there was a significant decline in both instructions and transactions in the second half.
This reflected a pattern seen in other regions and was caused by a reduction in consumer sentiment, uncertainty about interest rates and other macroeconomic policies as well as the unavailability of bank discretions about mortgages.
Going forward agents said the Munster market would be dominated by those wanting or needing to trade up and while it was expected that there will be an increased supply of apartments in Cork and other urban areas, there would continue to be a shortage of new homes, particularly in rural areas where new developments are not yet financially viable.
Other issues cited by the 460 estate agents who took part in the survey was the lack of supply of affordable homes, especially in the €200,000 to €300,000 range, the continued flow of investors out of the rental market and delays in conveyancing, with the average time for a home sale to close being five and a half months.
