“House prices are falling in two thirds of Irish micro-markets”. Thus says Daft Q4 report, now out. Ronan Lyons says: “slightly falling sale prices reflects greater affordability and, if housebuilders are becoming more efficient, greater viability”. The IT reports on it here:
Ronan Lyons predicting that developers will hold back supply now that prices are dropping
Ronan Lyons, economist at Trinity College, and author of the Daft.ie report, said the fall in prices had been caused by an increase in the construction of three and four-bed owner-occupier homes now coming on the market, in particular in the Greater Dublin Area.
Over the next year-and-a-half property developers will try to get a better understanding of the market to ensure that it is not “flooded” with homes.
“If developers release too many homes at once, prices will go down. Over the next 12 to 18 months developers will be trying to figure out the market and not flood it,” he said.
Something really wrong with the marketplace if a learned commentator can be suggesting that developers will act or be able to act in concert like that…
A rational developer should be looking at their costs of holding land and financing development in the future versus what they can get now. Maybe the government should be watching this closely and increasing the costs of holding development land.