House price inflation used to be big news, particularly when the annual rate was high (and close to 10 per cent). Not any more. The endless glut of bad news relating to property here has desensitised us.
The Central Statistics Office’s latest property price register, indicating that prices grew at an annualised rate of 7.8 per cent in June, blew through yesterday’s newsflow like a tumbleweed.
The headline rate is almost twice the rate at which wages are growing, attesting to the squeeze on would-be buyers, but it’s something we’ve nearly come to expect.
Last August, the annualised rate of inflation was more than 10 per cent. Two years before that it was over 15 per cent.
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The latest figures also showed that just 937 of the 4,029 homes bought in June were new builds, highlighting the supply problem at the heart of the market and the faint hope the Government has of reaching its target of 41,000 new homes this year.
The Economic and Social Research Institute (ESRI) is forecasting just 33,000 new home completions this year and 37,000 in 2026, well below Government targets.
The CSO figures also indicate that first-time buyers were involved just over a third of new home sales (36 per cent) while non-households – the State and institutional investors- snapped up 41 per cent.
The latter metric merely highlights that a lot of the new homes coming on stream never make it out on to the open market.
Goodbody economist Dermot O’Leary excavated a fig leaf of good news by noting that while second-hand home prices grew by 8.8 per cent, new home prices grew at a more moderate rate of 4.2 per cent.
“Second-hand price inflation has exceeded new home price inflation for the past five quarters, with inflation in the new homes sector now modestly below wage inflation after a spike in 2022/ 2023 as construction costs surged,” he said.
The June snapshot of house prices was depressingly predictable like the previous month’s.
