New figures from MyHome.ie show that ask prices in Dublin increased by almost 12% in the year to September, while in the rest of the country prices were around 9% higher.
Conall Mac Coille, chief economist with Davy, authored the report. He said the figures pointed to more of the same, with house price growth showing no signs of abating. "When we look at borrowing, the median first time buyer is borrowing around €200,000. That's around three times their income and well below the Central Bank threshold of 3.5 times income. With the market as tight as it is, banks have the scope to lend more and that will drive prices higher as people go to get more mortgage debt," he said.
Mr Mac Coille said as the level of borrowing moves towards the 3.5 times income threshold, there will undoubtedly be calls to relax the Central Bank rules even further. "During the recession, after we had the property crash, everyone was keen to have rules. But when the economy gets going and people are sufficiently confident to buy houses, they fall into the trap of saying we should be allowed borrow more or have subsidies to help people buy. It wouldn't surprise me if we heard calls to relax the rules in 12 months time."
Asked about a new study indicating that the level of housebuilding is about a third of the official estimates, Conall Mac Coille said it was long suspected to have been the case. "We've traditionally used electricity supply grid connections to measure house building. There's an element of double counting. And you've ghost estate that lay vacant for years, for example. As they've come on the grid, it's contributed to those numbers. You can use alternative measures which point to a much lower level - about 5 or 6,000 units that are truly new build - and then one off houses, so the true level is probably around 7,500. But housebuilding demand is at least 35,000 or could be as high as 50,000. Whether or not we use official numbers, there's still a massive gap between demand and supply," he concluded.
MORNING BRIEFS - There has been a sustained interest in finance roles in Ireland among UK based professionals since the Brexit vote. According to jobs website Indeed, there was a 39% increase in searches among UK based professionals for roles here in the last three months over the three months prior to Brexit. In the immediate three months after Brexit, the increase was of the order of 37% meaning the interest has not only been sustained but is increasing.
*** The majority of Irish hotels and guesthouses are seeing a continued fall in business from the UK despite business levels increasing overall, according to a report from the Irish Hotels Federation. The findings reflect those of the CSO which has been reporting a drop off in visitor numbers from the UK since last year when sterling took a hit after the Brexit vote.
*** Housing completions are much lower than official estimates, according to a report from Goodbody this morning. Official figures rely on electricity connections which imply that almost 15,000 units were completed last year. But Goodbody looked at Building Energy regulations which indicates that the level of completion was closer to 5,000 units in 2016.
*** The manufacturing sector posted continued growth last month, according to Investec Bank. However, there was slower growth in export orders which has been attributed to the euro's strength against sterling and that has impacted on demand from UK customers.