Number of dwellings for sale in State falls to record low, figures show

The number of housing units for sale in the Republic declined by 17 per cent to 22,100 year-on-year in January, according to an analysis by Sherry FitzGerald, the country's biggest estate agent.

The company said this marks a new low in the number of houses available for sale throughout the State. The figure equates to just 1.2 per cent of the total private housing stock across the country.

In Dublin, the reduction in supply was even more pronounced, with just 2,800 properties advertised for sale in January, down 30 per cent year on year.

That represented just 0.6 per cent of the capital’s private housing stock and compared with 4,000 units available in January 2016.

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Supply levels in Dublin have declined by 43 per cent since January 2010.

Property values rise

Meanwhile, the estate agent’s own house price index shows the value of residential property rose nationally by 1.9 per cent in the first quarter of the year, compared with an increase of 1.3 per cent for the same period of 2016.

This was based on a basket of 1,600 units across its network of branches and represented trends in the second-hand residential market.

In Dublin, the inflation was more pronounced, rising to 1.8 per cent from 0.7 per cent a year ago. When Dublin is excluded from the picture, the growth rate rises to 2 per cent, the same increase as a year earlier.

Sherry FitzGerald’s analysis also found that 47 per cent of house purchasers in 2016 were cash buyers and that there is an exit of investors from the market.

A breakdown of vendor and purchaser profiles in the opening quarter of this year revealed that 32 per cent of vendors were selling investment properties, with investors entering the market making up only 19 per cent of transactions.

Supply-side crisis

Sherry FitzGerald said this trend would exacerbate the supply-side crisis in the rental market, which it described as “already incredibly challenging”.

Marian Finnegan, chief economist with Sherry FitzGerald, said the rise in prices in the first quarter was "not at all surprising", particularly in Dublin. "Supported by a growing economy and a notable relaxation in the [Central Bank's] previously severe macro-prudential rules, demand strengthened, most particularly in Dublin," she said.

“The limited ability of supply to respond to this increase in demand has led to a period of heightened price inflation in Dublin, a trend which is likely to continue for the remainder of the year.”

Ms Finnegan said the increase in price inflation reflected both an uplift in demand and a substantial depletion in available supply in the market. "Our latest analysis . . . reveals the stock of available property throughout the entire country has fallen to a historically low level."

There were 2,900 properties advertised for sale in Cork in January, representing 1.4 per cent of its stock, while 1,110 were for sale in Limerick and 1,300 in Galway.

Some 44,700 properties changed hands last year, excluding portfolio sales. This represented 2.4 per cent of the private housing market. Sales volumes in Dublin rose 5 per cent to about 14,100.