Property prices continued to rise last month, with the strongest growth taking place outside Dublin.
The latest residential property price index from the Central Statistics Office (CSO) shows property prices were up 7.4% in the year to March.
That compares with an increase of 8% in February and an increase of 16.8% recorded in the same period to March 2015.
Prices increased by 0.3% in March against no change in February and an increase of 0.9% recorded in March last year.
When Dublin is excluded, residential property prices increased by 10.5% in the year to March. However, prices dropped by 0.2% last month.
Overall, house prices in Dublin are 34.3% lower than at their highest level in early 2007. Apartments in the capital are 41.2% below selling prices in February 2007. Residential property prices in Dublin are 36.3% lower than at their highest level in 2007.
The price of residential properties in the rest of the country is 35.4% lower than the peak in September 2007, while the national index is 33.6% lower than its highest level in that year.
Property Industry Ireland director Peter Stafford said that the two-tier increase in house prices, in Dublin and in the rest of Ireland, is masking an ongoing crisis in the supply of new housing.
“The moderation in house prices in Dublin compared to the rest of Ireland, created in part by the Central Bank mortgage lending rules, is masking a significant under-supply of new property,” he said. “In 2015, only 12,600 new houses were completed, against an estimated need for 21,000.
“This ongoing lack of supply into the housing stock is putting huge pressure on the private rented sector and increasing demand for social housing.
“Political leadership in creating a sustainable housing system for the long-term is more important than ever.”
Pat Davitt, chief executive of the Institute of Professional Auctioneers and Valuers, said the combination of a lack of supply to market, the Central Bank lending restrictions and the fact CSO figures do not include cash buyers who account for about 50% of sales rendered the figures “almost meaningless”.
Alan McQuaid of Merrion Stockbrokers said the improved economic backdrop should see house prices rise further.
“Following an average increase in house prices of 12.9% in 2014 and 10.6% in 2015, we are now looking for a more modest increase of 5% in 2016, with the biggest gains coming outside Dublin,” he said.
Mr McQuaid said it was also clear that the tighter mortgage-lending restrictions imposed by the Central Bank had helped to contain house prices.
© Irish Examiner Ltd. All rights reserved