Help-to-buy scheme will add ‘fuel to the fire’ and drive price rises, myhome.ie reports

Property prices are set to rise by at least 8 per cent in 2017, with double-digit growth a “distinct possibility”, as today’s launch of the new help-to-buy scheme, plus looser mortgage lending rules and constrained supply drive price growth across the country.

The prediction comes in a report from myhome.ie, the property website, and Davy, the stockbroking firm, which says the help-to-buy scheme will add “fuel to the fire” in driving price growth.

The scheme, which opens for applications today (January 3rd), will give first-time buyers of new homes 5 per cent back on the cost of their property.

According to the Central Statistics Office, property prices rose by 7.1 per cent in the year to October, while full-year calculations from estate agent Sherry FitzGerald, also published today, estimate that prices rose by 5.2 per cent for 2016 as a whole, a moderate increase on the 4 per cent recorded in 2015.

Prices in Dublin increased by 3.7 per cent in 2016, compared to 1.4 per cent in 2015, according to Sherry FitzGerald with growth of 7.4 per cent, 10.1 per cent and 6.9 per cent respectively in Cork, Galway and Limerick.

Despite recent price growth, however, average values are still about 40 per cent off peak 2006 levels.

Fall in supply

Predictions of an acceleration in house-price growth next year comes as the number of properties for sale across the country has fallen to a 10-year low.

New figures from Daft.ie, also published today, show just 21,700 properties for sale nationwide on the property portal in December 2016, the lowest since January 2007.