House prices “are only going one way” unless the lack of supply is resolved — as the cost of buying a home has surged by almost 13%.
Latest figures from the Central Statistics Office (CSO) show that house prices are accelerating at a rate faster than expected.
In the year to September, house prices jumped by 12.8% nationally compared to an increase of 11.8% in the year to August and a rise of 8% in the 12 months to September 2016.
In Dublin, residential property prices increased by 12.2% in the year to September. Dublin house prices increased 12.4%, while the price of apartments in Dublin increased 11.4% in the same period.
The highest house price growth was in Dublin City, at 13.9%.
In contrast, the lowest growth was in Dun Laoghaire-Rathdown, with house prices rising 9.9%.
Residential property prices in the rest of the country excluding Dublin were 13.2% higher in the year to September.
The west region showed the greatest price growth, with house prices rising 16.5%. The mid-west region showed the least price growth, with house prices increasing 9.8%.
Apartment prices in the rest of Ireland increased 15.5% in the same period.
Overall, house prices nationally are 23.7% lower than the peak in 2007. Dublin residential property prices are 24.5% lower than their February 2007 peak, while residential property prices in the rest of the country are 29.9% lower than their May 2007 peak.
From the trough in early 2013, prices nationally have increased by 70.2%.
In the same period, Dublin residential property prices have surged by 87% while prices in the rest of Ireland are 61.4% higher.
Economist with Merrion Fixed Income Alan McQuaid said property prices “are only going one way” in the short-term until the supply issue is resolved.
“Housing has now overtaken health as the main political ‘hot potato’ and the key focus in last month’s Budget was on measures that should help alleviate the problems going forward, but things won’t change overnight.”
“One can argue until the cows come home as to the merits of the proposals announced, but at least the Government has taken a step in the right direction, with an acknowledgement that something dramatic needs to be done and sooner rather than later.
“But as we wait for the measures to come through, prices will continue to rise,” he said.
© Irish Examiner Ltd. All rights reserved