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3rd January 2017
09:38am GMT
Uh-oh. It's happened again.
It's no secret that house prices have been on the rise across the country over the past few years but most of us have been keeping our fingers crossed that things will begin to stabilise sooner rather than later.
Unfortunately, a new report by Daft.ie has indicated that these increases could be the new normal.
House prices in Ireland rose by 8% on average in 2016, similar to the 8.5% rise in 2015.
"Normal does not mean healthy, however. We know that in a healthy housing system, any extra demand for more housing is offset by more supply – in other words, the real price of housing should be stable, once general inflation is taken account of. In Ireland, general inflation has effectively been zero not just over the last 12 months but indeed over the last decade."
Ronan Lyons, Assistant Professor in Economics, TCD
"So Ireland is currently trapped in a situation where housing prices are increasing far faster than prices in the rest of the economy. This is not sustainable but the latest indications are that this high rate of inflation is embedded in the market, due to strong demand and weak supply."
We are all well aware of the current housing crisis in Ireland.
There is far more demand for houses than there is houses being supplied. Too much, in fact.
"In total, Ireland needs at least 40,000 new dwellings a year and probably closer to 50,000. These will be concentrated in and near the urban centres and will be disproportionately homes for one- and two person households, such as apartments, downsizer homes and student accommodation. As the latest figures show, without this kind of supply, we will all have to spend more and more of our income just to have a home..."
daft.ie House Price Report: Q4 2016 - An infographic by the team at daft.ie
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