Shortage of Supply exacerbating house price inflation and volatility in Dublin
10% fewer transactions in April compared to March 2014
Urgent action to implement Construction 2020 needed
Wednesday May 28th 2014. The Society of Chartered Surveyors Ireland (SCSI) has said that the lack of supply in the market, particularly in Dublin, is fuelling the year on year increase of 18% in house prices to April as reported by the CSO. It also pointed to the 10% decline in the volume of transactions in Dublin in April compared to March 2014 as evidence of a lack of supply.*
The SCSI said that in the context of the recent Housing Agency report highlighting a demand for 80,000 units in urban areas over the next 5 years, urgent action must be taken to relieve the supply pressure on the market and to avoid a situation whereby house prices are pushed out of reach for prospective purchasers.
Conor O’Donovan, Director of Policy & Communicationswith the Society of Chartered Surveyors Ireland said “We have gone from building 89,000 units in 2006 to 8,300 in 2013 and clearly the current price inflation is being caused by the lack of building in recent years.
“The SCSI does not want to see a return to the unchecked price inflation we saw over a decade ago and neither do we want to see a continuation of the current house price volatility. We need to ensure more certainty in the economy and the Government’s Construction 2020 measures to meet the housing shortage must therefore be quickly progressed” O’Donovan said.
The Construction 2020 strategy identified 2,000 hectares of zoned land for housing in Dublin which is well served by public transport and other essential infrastructure and has the capacity to accommodate 30,000 units.
“We now need to see action on the supply side to ensure that the barriers to development including planning delays, zoning restrictions and availability of development finance are overcome to encourage builders to build homes on these zoned sites in urban areas to meet both the social and private housing requirements as identified by the Housing Agency. Demand is not the issue – a shortage of supply is” O’Donovan concluded.