By Conall Ó FáthartaIrish Examiner Reporter
Property prices have finally levelled off in Dublin but they are soaring in the rest of the country.
The latest property price index reports, from Daft.ie and Sherry Fitzgerald, reveal that Dublin is virtually a separate entity in terms of house prices when compared to the rest of the country.
According to the Daft report, price inflation in the capital has fallen from nearly 25% in mid-2014 to less than 3% by the end of last year. However, the rest of the country saw a rise from 2% to 13% in the same period.
Similarly, Sherry Fitzgerald reported that Dublin house prices grew by just 1.4%% last year compared to 18% in 2014. Residential property outside Dublin was up 7.6% in the 12 months to end December, compared to 13.9% during 2014.
The Daft.ie study found that, nationally, the average asking price reached its lowest point in the third quarter of 2013 and has risen 25.2% or by €41,000 since then.
However, in Dublin the bottom was reached in the second quarter of 2012 and prices have risen by an average of 40% - or €88,000 - since then.
The last part of the country to see prices level off was Limerick. Although prices only reached bottom in the last quarter of 2014, they have risen by 22% in the city and 12% in the county in the last 12 months.
Meanwhile, the amount of property on the market is at a nine-year low. Having fallen from a peak of over 60,000 in 2009, there are just over 25,000 properties for sale in the country, the lowest total since early 2007.
According to Daft.ie figures, the most expensive areas in Ireland to buy a house in are south County Dublin (€514,845), south Dublin city (€339,550), north Dublin city (€277,136) and Wicklow (€273,869).
The least expensive places in which to buy a home in Ireland are Longford (€98,058), Leitrim (€104,256), Roscommon (€107,929), and Sligo (€112,424).
The Daft study revealed that while asking prices fell outside the cities between September and December of last year, they continued to rise in Cork, Limerick and in particular Waterford.
The average asking price for a house in Cork city now stands at €227,196 — up 20.7% on last year. In Waterford city, the average house price is €129,397 (up 18.6%), while in Limerick city a house costs an average of €145,244 (up 22.3%). The average asking price for a house in Kerry is €156,423 — up over 8% on 2014. In Clare it is €143,030 — a jump of almost 18%.
There has also been a lift in the speed of sales in Munster. Just under half (47%) of all properties in the province find a buyer within four months — up from 43% in 2014.
Prices are higher now than a year ago everywhere in Connacht and Ulster. However, the largest percentage increases are in Galway city (20%) and Cavan (18%) where the average asking price for a house is €223,602 and €124,183 respectively.
Author of the Daft.ie report and economist at Trinity College Dublin, Ronan Lyons, said the new mortgage rules means we are unlikely to see the huge spikes in house prices experienced during the boom.
“The housing shortages persist. Just 25,000 homes were on the market on December 1 this year, the lowest for this time of year since 2006. Nonetheless, the outlook for the housing market looks much healthier now than it did in 2014. Perhaps most importantly, the mortgage rules mean that whatever else happens, house prices cannot engage in the destructive upward spiral that took place in the decade to 2006,” he said.
Mr Lyons said while tough reforms were still needed, “at least there are encouraging signs that policymakers understand not only the nature of the problems but also of the solution.”
Chief economist with Sherry Fitzgerald Marian Finnegan predicts single- digit price inflation in 2016.
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