Property shows encouraging signs
In December there were 3,213 property transactions, the biggest monthly total in three years. This follows relatively buoyant activity over October and November, which saw 2,310 and 2,919 transactions respectively. For the full 12 months last year there were 24,249 transactions, which is a 34% increase on the previous year.
The Dublin market is pacing ahead of the rest of the country. The capital recorded 8,504 property transactions in 2012, which is a 46% increase on 2011.
“While the strong finish to 2012 is likely to have been partly driven by a rush to avail of mortgage interest relief before its phasing out on Dec 31, the data show a marked pick-up in transactions activity throughout the whole of last year, with every month recording gains of between 12% and 53% on an annual basis,” says NCB stockbrokers’s chief economist Philip O’Sullivan. “In contrast, the number of transactions in 2011 was 13% below year-earlier levels.
“Overall, these data strengthen our view that the Irish housing market entered a new phase during 2012. In addition to the significant rise in transactions noted above — albeit off low levels — residential property prices began to stabilise. Central Statistics Office (CSO) data released earlier this week show that national property prices were -4.5% year on year in 2012, snapping a run of four consecutive years of double digit price declines, while Dublin prices were -2.5% year on year,” added Mr O’Sullivan.
Ireland has experienced one of the worst house price crashes of any western economy. Prices for residential homes fell roughly 60% from peak to trough. The Government will be hoping that the market stabilises at these levels.
A floor under house prices is needed to improve consumer confidence in the economy. However, anecdotal evidence suggests that a two-speed recovery is under way. Demand is said to be outstripping supply in certain parts of Dublin. But there is still an oversupply in more rural areas, particularly in the midlands.
