Property prices increased by 13% in last two months; Leading to “involuntary social engineering”: Brokers Ireland

New figures from the Central Statistics Office (CSO) have shown that in the year to February, residential property prices have increased by 13%.

The latest statistics compare with an increase of 12.0% in the year to January and an increase of 9.7% in the twelve months to February 2017.

The CSO reveal that in Dublin, residential property prices increased by 12.7% in the year to February. Dublin house prices increased 12.3%. Apartments in Dublin increased 14.5% in the same period.

The highest house price growth was in Dublin City, at 14.2%. In contrast, the lowest growth was in Dun Laoghaire-Rathdown, where house prices increased 9.6%.

Residential property prices excluding Dublin were 13.3% higher in the year to February.

The Midland region showed the greatest price growth, with house prices increasing 14.8%. The South-East region showed the least price growth, with house prices increasing 8.6%. Apartment prices in the Rest of Ireland increased 14.6% in the same period.

Overall, the national index is 21.8% lower than its highest level in 2007. Dublin residential property prices are 23% lower than their February 2007 peak, while residential property prices in the Rest of Ireland are 27.5% lower than their May 2007 peak.

The CSO reports suggests that since 2013 prices nationally have increased by 74.6%.

In Dublin residential property prices have increased 90.6% from their February 2012 low, whilst residential property prices in the Rest of Ireland are 66.7% higher than the trough, which was in May 2013.

Reacting to the figures today Brokers Ireland siad the news was indicative of the severe housing deficit and that this is giving rise to a form of “involuntary social engineering”.

Rachel McGovern, Director of Financial Services at Brokers Ireland, which represents 1,300 broker firms, said those most severely impacted are the ‘squeezed middle.’

“With rapid house price inflation, particularly in Dublin many seeking homes are being pushed further and further away from their places of work and in many cases families too, with long and expensive commutes.

“It’s effectively a type of involuntary social engineering,” she said, pointing to today’s figures showing the highest price inflation in the Midlands at 14.8pc.

“Home ownership achieved at affordable prices is critical to growth in personal wealth over time. Many in their 20s and 30s are being deprived of this opportunity, previously considered the norm,” she said.

“This in time is going to have a huge cost personally, economically and socially.”

She went on to suggest that while the building of new homes was increasing from an extremely low base the supply shortage is acute “leaving consumers with the Hobson’s choice of both increased house prices and rents.”

Brokers Ireland also pointed to Census data taken in 2016 which found home ownership rates had dropped to 67.6% (from a high of 80% in 1991) and total housing stock grew by a mere 8,800 (0.4%) between 2011 and 2016.

- Digital Desk

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