Residential Property Price Barometer
The latest Residential Property Price Barometer launched by IPAV, the Institute of Professional Auctioneers & Valuers, shows while house prices in a majority of locations have dropped slightly, apartment prices in most areas have increased.
In Leitrim the change in the six month period has been:
· + 5.08% for 2-bed apartments
· + 4.60% for 3-bed semi-detached houses
· + 2.97% for 4-bed semi-detached homes.
Pat Davitt IPAV Chief Executive said it is still the case that second-hand properties in many areas of the country can be bought for less than the cost of building the same property. “In some areas the difference is substantial,” he said.
And he said there is no question of a new property bubble emerging. “The factor that led to the quick ramping up of prices is the same one that is now prompting would-be buyers to hold back. It’s a question of confidence, people want to buy at a reasonable price but on the other hand there is a fear of paying too much and getting caught in negative equity, a sentiment that runs very deep and has become intergenerational since the financial crisis.”
IPAV this week, in a pre-Budget submission, called on the Minister for Finance to support that the 3.5 times loan-to-income threshold for mortgages be increased to 4.5 times income, to ensure those on lower incomes who can afford mortgage repayments are able to access mortgage finance and not be forced into the rental market where rents far exceed the price of servicing a mortgage.
Mr Davitt said the outcome of IPAV’s Property Barometer would appear to indicate that the rules are pushing buyers to purchase apartments or to locate in areas with comparatively lower prices.
“Young people are severally disadvantaged in the current market,” Mr Davitt said. “At a time when they are but starting in their careers large numbers of them are paying rents at levels way beyond the price of servicing a mortgage and are trying to save for a mortgage deposit at the same time, an impossible task for many.
“For those on incomes of €30,000 - €40,000 it is practically impossible to buy any form of property even though they can well afford to.
IPAV is also calling for the scheme to be extended to cover second hand homes, saying it would encourage a more natural movement in the market.
The Help-to-Buy scheme provides for a refund of Income Tax and DIRT paid over the previous four tax years, limited to a maximum of 5% of the purchase price of a home up to a value of €500,000. The refund is capped at €20,000.