Stats show two-tier market
Asking prices for three-bed semi-detached homes in Galway City rose by almost 8% over the past year, while similar properties in the county dropped by 12%, according to a new report.
And the undersupply of housing in the city has been recorded as the “most pressing” concern for those in the market for a new home.
The figures from Daft.ie show that overall, asking prices (as opposed to eventual selling prices) are up 3% in Galway City, and are now averaging €170,000.
“In Galway City, prices in early 2014 were 3% higher than a year previously, compared to a fall of 11% seen a year ago. The average house price is now €165,000, 5% above its trough last year.
“In the rest of Galway, prices in early 2014 were 4% lower than a year previously, compared to a fall of 16% seen a year ago. The average house price is now €131,000, 59% below peak levels,” the report reads.
The report shows that the average asking price for a one-bed apartment in Galway City is €78,000 (up 5.6% over the last twelve months); a two-bed terraced house up 4.6% to €87,000; a three-bed semi is up 7.7% to an average of €140,000 and the asking price for a four-bed bungalow is up 11.7% to €242,000.
There was a drop in the asking prices for a five-bed detached house of 3.2%, to an average of €288,000.
In the county, average asking prices for one-bed apartments are down almost 18% to €46,000; a two-bed terraced house is down 8.5% to €53,000; a three-bed semi is €76,000 (down 12%); a four-bed bungalow is €159,000 (down 2.2%), while a five-bed detached house is asking an average of €176,000 (down 4.7%).
Ronan Lyons, economist with Daft.ie said that lack of restrictions on lending could fuel another bubble.
“Ultimately, expectations may be the spark, but credit is the fuel. Currently, the survey indicates that people are looking to buy a house worth about four times their income (4.5 times in Dublin). This is in line with prudential lending.
“But currently, no regulation exists in relation to lending standards. An obvious step for the Financial Regulator would be to introduce a minimum deposit (i.e. a maximum loan-to-value).
“Experiences from other countries suggest that this simple tool can work wonders in stemming demand that is fuelled by expectations about prices rising in the future.
“For the first time since 2007, the average asking price outside Dublin rose on a quarterly basis. This may the first indications that a better match is being found between demand – which will be boosted by the fall in unemployment, and supply, which has eased back considerably in the last two years,” said Mr Lyons.