Auctioneer calls on banks to review lending policy amid rising house prices in Mayo
A Castlebar-based auctioneer has attributed rising house prices in Mayo to the difficulty that builders and developers face when trying to access financial help from Ireland’s pillar banks.
Cyril Burke was reacting to a report produced by Daft.ie which found that Mayo house prices have gone up by 7.9pc, making the average price in the county €234,406. The median price of a new home built between October and March of 2024 was reported to be €350,000. A limited supply of homes on the market and lack of new homes being built were given as the reasons for the soaring increase.
Speaking to the Irish Independent, Mr Burke stated that access to financial help from Ireland’s two pillar banks, Allied Irish Banks (AIB) and Bank of Ireland (BOI), was linked to the housing shortage and in turn, the increase in house prices.
Mr Burke said, “One of the biggest problems is finances. I have been saying this for the last four to five years,
“AIB and BOI need to review their policy on the builders and developers that were involved in the crash that had to start again. A lot of them have reinvented themselves but they can’t get access to money from the pillar banks.”
He continued, “Because of their history, the banks won’t give them a fresh start. [The banks] need to wipe the slate and start again.”
Mr Burke explained that before the 2008 financial crash, builders were able to get sums of money from the bank after they had completed different stages of construction,
“You used to be able to draw down at different stages, so when the foundations were in you would get a draw, when the wall plates were on and ready for roofing, you would get a draw. Now the pillar banks won’t release any funding until you hand over the keys,” he said.
This leaves builders and developers short of financial help when carrying out a project. It harms smaller businesses in the industry leaving them without access to sufficient funding. This has led to fewer projects being taken on, contributing to the housing shortage across Ireland, and forcing prices up.
According to Daft.ie house prices have risen by 12.3pc nationwide since March of last year, with the Connacht and Ulster region average price rising by 9.4pc.
Last month, Castlebar Municipal District Council unanimously declared a housing emergency. It was reported that 437 new homes were needed to meet the growing need for housing in the county town. It was reported by the Irish Independent that new three-bedroom properties in the area are selling in the region of €390,000.
This article was funded by the Local Democracy Scheme