House prices are surging at double-digit rates in cities outside Dublin, while the capital’s housing market has stabilised, new figures show.
However, while there are signs of improved health in the housing market, under-supply remains a problem and lower-income families could be priced out of the Dublin City market unless building costs are reduced and Central Bank mortgage rules are relaxed.
These are among the key findings of Daft.ie’s latest house price report for the second quarter of the year, published last night.
Daft.ie in its latest report, one of the most definitive barometers of the Irish housing and rental market, shows that nationally, house prices rose by an average of 6.3% in the year to June, with prices in Dublin up 1.1%, and a national average asking price of €215,000, compared to €202,000 a year ago.
However, strong demand has seen prices increase by between 11% and 17% in Cork, Galway, Limerick and Waterford, with the average asking prices as follows:
Year on year, prices were 11.2% higher in Cork, up 14% in Galway, 15.2% in Limerick City, and 17.4% up in Waterford.
The most expensive areas to buy are in south county Dublin, south and north Dublin City, and Wicklow, with Longford (€104,000), Sligo (€117,000), Leitrim (€118,000), and Roscommon (€121,000) the cheapest.
In Dublin, prices have risen by an average of €94,000, or 42%, from their lowest point in mid-2012, and outside the capital, the average increase has been €43,300, a 32% increase, since the end of 2013.
The report does show some positive signs with the total number of properties for sale nationwide showing a rare increase between March and June.
Report author Ronan Lyons, an economist at Trinity College Dublin, said the overall dynamic in the housing market is one of strong demand pulling up prices.
“In Mayo and Roscommon, for example, average prices have increased by roughly 10% since the start of the year,” he said.
“The obvious exception to this is Dublin, where Central Bank rules have linked house prices to the real economy. What we are seeing in the capital is buyers seeking out good-value locations.
“Whereas prices are now falling in year-on-year terms in markets like Dublin 6 and South County Dublin, they are rising by roughly 5% a year in areas like Dublin 10, Dublin 11 and Dublin 12.”
Meanwhile, the MyHome.ie property report in association with Davy said supply shortage and wage inflation were the key factors underpinning the latest price surges.
Report author, and chief economist at Davy, Conall MacCoille, said the average ‘sale agreed’ time falling to a new low of just four months — the first time it has fallen below five since 2008.
The MyHome report also shows that in May, the average mortgage approval rose to €208,000, the first time the figure has exceeded €200,000 since the report began tracking it in 2011.
MyHome.ie managing director, Angela Keegan, said they also found a 20% increase in completions in the first four months of the year.
“And if that continues total completions for 2016 will be 15,200. While this is an improvement, it is still well short of the 25,000 we will require on an annual basis for the foreseeable future,” said Ms Keegan.
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