Report shows average asking price for house in Clare now in excess of €210,000
HOUSE prices in Clare are rising at the quickest rate in years, new figures from Daft.ie show.
In its report on the second quarter of the year, Daft.ie found that the average price sought for a house in Clare is now €210,676. That was up by 9.2% on the previous quarter and by 15.4% on the second quarter of 2020.
House prices in Clare are now 76.2% higher than they were at the bottom of the market, near the beginning of the last decade.
While the level of growth in prices in Clare is obviously very significant, it was below average for Munster in percentage terms, with asking prices across the province increasing by 18% year on year.
Writing in the Daft.ie report, Professor Ronan Lyons of Trinity College stated that Covid resulted in an intensification of demand, and a decline in available supply as construction stopped and people were reluctant to put their properties up for sale.
“Demand expanded because of the very peculiar nature of this economic crisis, compared to others,” wrote Professor Lyons.
“While some sectors were almost obliterated overnight, and survived only with government support and forbearance from lenders, large parts of the economy – especially those on higher incomes – were unaffected other than a reorganisation of how work got done.”
With far fewer outlets for consumer expenditure, Prof Lyons noted, housing became a sink for savings.
“Supply ground to a halt for two reasons. Firstly, and arguably the lesser of the two factors at least for now, construction was halted. Due to the nature of the work, it fell victim to public health measures,” he stated.
“However, the overall impact on the number of homes built has been modest, comparing for example homes built in 2020 (nearly 20,700) with the number built in 2019 (just over 21,000).
“So while construction remains woefully inadequate compared to the true level of housing need in Ireland – likely as high as 50,000 new homes across all tenures and types – it can’t explain the spike in prices over the last year.
“Instead, it is the second-hand market that is driving the fall-off in supply. Between 2015 and 2019, the typical month in Ireland saw just under 5,000 homes listed for sale, the vast majority of those second-hand.”
He feels the future of the property market is quite hard to call.
“It’s understandable that would-be homebuyers – some living, and working, in less-than-ideal circumstances for over a year now – feel angry about their predicament,” he noted.
“When will respite come for those looking to buy a home? The answer, as it almost invariably has been for nearly three decades in Ireland’s housing market now, depends on supply.
“It is reasonable to expect that, once people have enjoyed the relaxing of restrictions and summer staycations are done, that some of the backlog of second-hand homes will come on to the market.
“We don’t know yet what day-to-day life will look like in October or November, but compared to recent months, it’s likely to feel a lot more normal. This makes viewing a home easier and thus putting your own home on the market less risky.
“If the second half of the year saw a bumper crop of homes put up on the market, we could well see prices ease back a bit from their current levels, especially as household income finds other outlets again.”
If that scenario were to come to pass, Prof Lyons wrote, and office work made a comeback, there could be a quick reversal of prices in some areas.
More likely, he observed, the volume of listings will gradually return to pre-Covid levels as the year progresses which would take the sting out of the market but perhaps not be enough to bring rapid price reversals.
“Beyond 2021, however, we cannot rely on recycling the same stock of housing as our population grows and as our household size shrinks. The country desperately needs tens of thousands of new homes a year – and for decades.
“Rather than cap the construction of new homes, as the government’s new Housing Need & Demand Assessment tool seeks to do, policy must do an about-face and look to boost the building of homes where they are needed.”
Owen Ryan has been a journalist with the Clare Champion since 2007, having previously worked with a number of other publications in Limerick, Cork and Galway. His first book will be published in December 2024.