House prices up for first time in 5 years

House prices have risen for the first time since 2008, the strongest sign yet that the worst of the housing market crash is over.

Latest figures from the CSO show average property prices rose by 1.2% over the year to June. It is the first annual increase in national house prices since Jan 2008.

Property prices in June alone rose by 1.2% compared with an increase of just 0.3% in May.

The rise in property prices was more pronounced in Dublin where the average price of residential property is up by 4.2% compared with a year ago with a month-on-month increase of 1.7% in June.

There was particularly strong growth in prices for apartments in Dublin which are up 9.7% over the past 12 months.

However, the CSO warned the low level of transactions in this property sector makes the results more volatile than in larger markets.

Overall, the figures also provide further proof of the emergence of a two-tier property market as increases in house prices in Dublin are totally responsible for the increase in the national average.

If house prices in the capital are excluded, the average price of residential property in the rest of the country actually fell by 1%.

Despite the first national increase in house prices in over five years, average prices are still 50% below what they fetched at the height of the construction boom.

Average house prices in Dublin are still 54% below their peak level recorded in early 2007, while apartments in the city are 58% below their highest level.

Outside Dublin, the average price of residential properties is 48% below their peak level.

The CSO’s Residential Property Price Index is calculated using data on mortgage draw downs provided on a monthly basis by eight of the main lending institutions.

However, it excludes cash-based transactions which are reported to account for a large number of current residential property sales.

A recent survey, by the Irish Examiner, of all transactions recorded on the Residential Property Price Register in the first six months of 2013, revealed the overall number of property sales was up by 6% compared to the corresponding period in 2012.

However, it also highlighted how average house prices were continuing to fall in all counties outside the greater Dublin area.

Meanwhile, a separate report published by estate agency DNG on house prices had findings at considerable variance to the CSO figures.

The DNG survey claimed national house prices have jumped by 15.1% in the year to Jun 2013.

It also estimated that almost two thirds of property sales in the first quarter of the year were cash transactions.

DNG chief executive Keith Lowe said the lack of new home construction in Dublin was placing upward pressure on prices in the capital.

However, Mr Lowe said there were still challenges in many other areas due to high unemployment levels and an oversupply of housing stock.

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