Second-hand house prices up 166%

SECOND- HAND house prices in Dublin have risen by a staggering 166% over the past six years, with the average house in the city costing €370,000.

According to a new report by estate agents Hamilton Osborne King (HOK), prices in the city will rise by a further 10-12% by the end of this year.

The HOK Dublin residential market report found that since 1997 prices in Dublin have risen from €140,000 to €370,000 at the end of June this year, and further increases are expected.

A survey of consumer attitudes on the housing market from IIB Bank and the ESRI this week found that most consumers only expect a 5% rise in house prices.

HOK Residential chairman Aidan O’Hogan says the market has proven remarkably resilient in the past couple of years.

“Relative to the significant price rise in the late 90’s, driven by a supply shortage in a rising demographic, growth has been stabilised but continues to show year on year increases, with continued demand for residential properties close to good public transport, and adjacent to the city centre.”

He said the market is constrained by a lack of volume with sales “bunching up” below the highest level of stamp duty, which is acting as a deterrent for those considering trading up to a better home.

In 1997, approximately 21% of all residential properties in Dublin cost less than €100,000. Today there is “little or nothing available” for this price in the city, said HOK.

Looking at individual areas of the city, it found that prices in Dublin 3 and 5 on the Northside of the city had risen by more than anywhere else in the city with a 210% rise in Dublin 5. The report says there has been a strong increase in Dublin 7, due to a shortage in supply of three and four bedroom properties.

Prices on the Southside of the city are continuing to rise, with those close to the LUAS tramline showing strong growth.

The HOK report said: “Demand is strong for mid-price properties in popular locations where there is limited volume of housing stock on the market.

Interest continues to be strong for period homes in Dublin 4 and Dublin 6, in walk-in condition.”

“The residential market continues to perform well, with strong results to date in the current auction season. Volume continues to be the key issue.

“Addressing stamp duty rates could play a significant role in alleviating this problem, and it will be interesting to see if, or how, this matter will be addressed as prices continue to rise,” Mr O’Hogan added.

The HOK report also looked at the apartment market, which saw average prices jumping by 197% over the six years to June 2003, with an average price of €315,000.