Advertisement

We need your help now

Support from readers like you keeps The Journal open.

You are visiting us because we have something you value. Independent, unbiased news that tells the truth. Advertising revenue goes some way to support our mission, but this year it has not been enough.

If you've seen value in our reporting, please contribute what you can, so we can continue to produce accurate and meaningful journalism. For everyone who needs it.

Shutterstock/Alexander Raths

What are house prices going to do in 2016?

They’ll be increasing, but very gradually.

HOUSE PRICES WILL continue to rise in 2016 but not at the “unsustainable pace” that was seen over the last few years.

That’s according to the latest property report from MyHome.ie which is predicting a 5% rise in house prices this year.

The Q4 2015 report notes that there has been a slowdown in house price rises in the second half last year, with author Colm MacCoillewelcoming this development.

“The Central Bank’s mortgage lending rules appear to have prevented home-buyers from taking out ever-higher leveraged mortgage loans, thus limiting the pace of house price inflation,” he says.

Despite this, MacCoille argues that personal incomes rises will mean that house prices will keep going upwards, even if it is at a gradual rate. A recent IBEC survey indicated that 71% of companies expected to increase basic pay by 2% in 2016.

Income growth is now accelerating, driven by public and private sector wage increases, tax cuts and the introduction of a higher minimum wage. The lack of supply in many urban areas also remains acute. So a single-digit gain in Irish house prices, close to 5% seems likely through 2016.

PastedImage-92944 MyHome.ie MyHome.ie

The MyHome.ie report notes that house prices in Dublin are slipping and are becoming more in line with the rate outside the capital. Asking prices in Dublin, for example, fell in both final quarters of 2015.

This trend is predicted to continue next year with house price inflation outpacing the capital.

This is perhaps no bad thing, as MacCoille explains, with analysis showing that prices in Dublin are much more unaffordable relative to income.

The median asking price for a three bed semi in Dublin is €275,000 which is six times the average income of €45,600. In contrast, house price to income multiples in many other areas are still in the range of three to four, so looking forward there is probably more room for prices to catch up outside Dublin.

Read the full report >

Read: Dublin house prices are being hit and hit again by the new mortgage rules >

Read: House prices outside of Dublin are flying up >

Close
27 Comments
    Install the app to use these features.
    Mute Paul Wallace
    Favourite Paul Wallace
    Report
    Jan 11th 2016, 6:18 AM

    I’m personally happy with the new banking rules for deposits etc and it’s good it’s already effected prices. The only people who are not happy are the ones who are either wanting to buy properties they really can’t afford or have no place buying in the first place. No one should be looking at buying a 3 bed in Dublin 4 as their first house if they are on normal wages.

    125
    Install the app to use these features.
    Mute Beano
    Favourite Beano
    Report
    Jan 11th 2016, 6:51 AM

    You’re talking nonsense Paul. No one is talking about buying a house in Dublin 4. What you have now is a situation where a couple with good jobs, earning good money, who would be able to pay a mortgage of 300,400,even 500+ easily are not being allowed the opportunity because they need anything from 30 to 100 grand deposit which if paying rent as well is impossible to save for. It’s not fair. Other measures need to be brought in.

    88
    Install the app to use these features.
    Mute NO 2 FF/FG/LAB
    Favourite NO 2 FF/FG/LAB
    Report
    Jan 11th 2016, 6:58 AM

    How can people even save with today’s rent prices?

    94
    See 12 more replies ▾
    Install the app to use these features.
    Mute The Guru
    Favourite The Guru
    Report
    Jan 11th 2016, 6:59 AM

    If they can pay a mortgage 300, 400 or 500k “easily” then why can’t they save 30k for a deposit? The age of property being a human right in Ireland are over and that’s a good thing. These rules are good. That said, something needs to be done about rent costs and tax on deposits to help people save if they want to.

    99
    Install the app to use these features.
    Mute NO 2 FF/FG/LAB
    Favourite NO 2 FF/FG/LAB
    Report
    Jan 11th 2016, 7:11 AM

    We are way to short on supply to be just changing tax on deposits and rent costs. We need to get building

    27
    Install the app to use these features.
    Mute The Guru
    Favourite The Guru
    Report
    Jan 11th 2016, 7:15 AM

    Short on supply in Dublin because everything is so stupidly centralised. If they want everything in Dublin, fine. But then invest in proper transport links with surrounding counties so people can live there. It’s a tiny country with loads of space.

    64
    Install the app to use these features.
    Mute NO 2 FF/FG/LAB
    Favourite NO 2 FF/FG/LAB
    Report
    Jan 11th 2016, 7:29 AM

    I’m more than happy to see rural development as yes you are right there are too many people in dublin yet they are already here so we either build more or relocate people. Which is it?

    12
    Install the app to use these features.
    Mute Ron Burgundy
    Favourite Ron Burgundy
    Report
    Jan 11th 2016, 7:38 AM

    Not enough houses in the country actually built to a long term sustainable standard. If you could be guaranteed a house that would last hundreds of years then it would be a good investment. Plenty of brown envelope building went on in the ‘good times’.

    24
    Install the app to use these features.
    Mute Paul Harte
    Favourite Paul Harte
    Report
    Jan 11th 2016, 8:47 AM

    Aren’t rent being driven up by this issue, hence the massive homeless issue we have?

    7
    Install the app to use these features.
    Mute Shane Harron
    Favourite Shane Harron
    Report
    Jan 11th 2016, 9:18 AM

    if you can’t put away 20% as a couple then you most likely can’t afford the house. If people can’t afford the houses what happens to the prices? they will eventually drop. The reason for the boom was the endless credit and people buying places they couldn’t afford.

    33
    Install the app to use these features.
    Mute Ciaran Ó Fallúin
    Favourite Ciaran Ó Fallúin
    Report
    Jan 11th 2016, 9:35 AM

    @Beano… Reread that comment of yours. For a 300k purchase, you’re bemoaning the need to front up 30k (I think it’s actually nearer 40k).

    That’s an enormous sum of money to be borrowing, and they require you to show an ability to have about an eighth of it saved up. Just because a couple could afford the monthly payments should never be enough in isolation.

    I appreciate it’s not easy to buy a house anymore, but it’s the biggest purchase of one’s life, it shouldn’t be easy.

    16
    Install the app to use these features.
    Mute Freddie Fox
    Favourite Freddie Fox
    Report
    Jan 11th 2016, 10:22 AM

    I agree with you totally, there are lots of affordable housing in the adjoining counties to Dublin, but failure of consecutive governments to establish a decent and affordable public transport system means everyone must live in the city. Public transport in this country needs to be improved dramatically but there appears to be no political will to do this as it would mean dealing with the unions!

    9
    Install the app to use these features.
    Mute Teddington
    Favourite Teddington
    Report
    Jan 11th 2016, 11:12 AM

    Freddie I don’t even care if the prices have to go up for the service but at the moment it is absolutely pathetic, and I do mean utterly pathetic, infrastructure in this country is always built about 10 years later as a reaction to a problem that already exists and by the time it is completed it is already insufficient and in need of massive improvement. The Luas should have been rolled out into several different areas already with a bigger mass transit system for certain areas (airport etc.), judging by the Green line in the mornings it is already at capacity and there’s nothing much that can be done to improve this any more but it wasn’t considered properly at the planning stage.

    3
    Install the app to use these features.
    Mute Patlyndo
    Favourite Patlyndo
    Report
    Jan 11th 2016, 11:57 AM

    Define a good income Beano? I have to agree with The Guru here, if such a couple cannot save a deposit while on a good income, then how could they be eligible for a mortgage of 300k,400k and 500k?

    10
    Install the app to use these features.
    Mute Muireann Ni Chonaill
    Favourite Muireann Ni Chonaill
    Report
    Jan 11th 2016, 10:08 PM

    And how exactly can a young couple save a deposit of 20% when they’re paying an enormous rent and a huge monthly childcare bill???? Seriously???!!!!

    1
    Install the app to use these features.
    Mute Paul Wallace
    Favourite Paul Wallace
    Report
    Jan 11th 2016, 7:09 AM

    If you can’t save for deposit you can’t afford a house.

    88
    Install the app to use these features.
    Mute Paul Harte
    Favourite Paul Harte
    Report
    Jan 11th 2016, 8:49 AM

    You also can’t afford rent! Paul have you been abroad for the last 5 years?

    39
    Install the app to use these features.
    Mute Frantz Harband
    Favourite Frantz Harband
    Report
    Jan 11th 2016, 7:27 AM

    Can pay easily a morgage of 500k. ….

    17
    Install the app to use these features.
    Mute Paul Wallace
    Favourite Paul Wallace
    Report
    Jan 11th 2016, 7:34 AM

    I know, some people are deluded. What if one of you lose your jobs ?

    35
    Install the app to use these features.
    Mute Patlyndo
    Favourite Patlyndo
    Report
    Jan 11th 2016, 12:03 PM

    Not even that Paul – but how do they pay for childcare in the future?

    A lot of people continually compare renting to buying – there is no comparison, just because you pay X amount in rent, does not translate to mean you can afford to pay X mortgage.

    The costs associated with buying are far greater then the rent that you pay – furnishing, maintenance, property tax, insurance.

    Add to that the flexibility to move if you can’t or no longer want to pay the rent.

    I find it bizarre that people “choose” to pay exorbitant rents in central Dublin (for example) instead of scaling down, house sharing, moving a little out, while saving for their deposit.

    They want to live in an accessible area, have a social life, holidays and on top of that want to be able to save for a deposit?

    Deluded.

    People need to get real.

    16
    Install the app to use these features.
    Mute Enda Elvery
    Favourite Enda Elvery
    Report
    Jan 11th 2016, 10:16 AM

    We all borrowed to the hilt to buy our houses.
    Deposits were small in the past,we got married and bought a house no rented accommodation required. So we paid from day one for the mortgage. And few lost their houses, jobs were scarce then too. But wages went up yearly faster then the interest rate, after about 7 years repayments were easier.
    Less furnishing expected then. Like the mothers old telly, a washing m/c a house warming seating arrangement, consisted of 3 empty beer barrels two planks covered by candlewick bed covers (wedding presents). Lot of tea bit of drink cakes sambo’s. (Early 70′s)

    9
    Install the app to use these features.
    Mute Patlyndo
    Favourite Patlyndo
    Report
    Jan 11th 2016, 2:36 PM

    Ducky – it is 10% for the first 220k and 20% on the balance.

    The deposit in your case is not 50k it is 28k.

    28k is 11.2%.

    8
    Install the app to use these features.
    Mute Ducky duckerson
    Favourite Ducky duckerson
    Report
    Jan 11th 2016, 2:02 PM

    Very unfair on first time buyers. To buy a house anywhere near my local area(near family aka future child minders and in kildare NOT Dublin) the house prices are avg €250k+ for a non new build standard 3 bed semi. As a new buyer than means a 20% deposit which is €50k. It is impossible to save this amount while paying extortionate rental fees. We can more than afford the mortgage, and we can afford to save a 10% deposit, but 20% for a small house is insane and unfair. New buyers have it so much harder than they did previously.

    5
    Install the app to use these features.
    Mute ULTRON
    Favourite ULTRON
    Report
    Jan 11th 2016, 2:51 PM

    That doesn’t make sense:

    “The median asking price for a three bed semi in Dublin is €275,000 which is six times the average income of €45,600. In contrast, house price to income multiples in many other areas are still in the range of three to four, so looking forward there is probably more room for prices to catch up outside Dublin.”

    If you can only borrow three and a half times your income and the average price in Dublin in six time the average income than looking forward there is very little scope for prices to ‘catch up’ outside of Dublin and Dublin prices have to come down to more affordable levels.

    4
    Install the app to use these features.
    Mute Ferdinand Torreggiani
    Favourite Ferdinand Torreggiani
    Report
    Sep 27th 2016, 3:12 PM

    People are homeless because they have either lost their homes or are unable to rent them, The rise in prices will increase the number of homeless people as the rents will go up.

    1
    Install the app to use these features.
    Mute Patlyndo
    Favourite Patlyndo
    Report
    Jan 11th 2016, 3:20 PM

    What also doesn’t make sense is why the median price is referred to in the price of a house and compared against the average wage?

    1
    Install the app to use these features.
    Mute Carpentoza
    Favourite Carpentoza
    Report
    Jan 11th 2016, 6:42 PM

    Average salary in Republic is 688 per week (cso) or do they mean aversge household income

    1
Submit a report
Please help us understand how this comment violates our community guidelines.
Thank you for the feedback
Your feedback has been sent to our team for review.