Property prices increase by 10.5% amid lack of supply

House and apartment prices increased by 10.5% to the end of April this year, the biggest rise since two years ago when prices rose by 11.2%, it has emerged.

Residential property prices outside of Dublin increased by 13.4% in the period up to April.

The highest house price growth of 17.8% was recorded in the West of Ireland, while growth was lowest in the Midlands at 9.3%.

Dublin house prices were up by 8.1% with apartments increasing 8.6%. Apartment prices in the rest of Ireland rose by 16.3%.

Since early 2013, prices nationally grew by 52.1%, with Dublin residential property prices increasing by 68.1%, compared to the rest of Ireland where they rose by 48.9%

However, overall residential property prices are still 30.7% lower than the Celtic Tiger peak in 2007.

Dublin residential prices are 31.3% lower than their February 2007 peak, with prices for the rest of Ireland 35.3% lower than a May 2007 high.

The figures, provided by the CSO, also showed in the 12 months to April, the average market price paid for a home was €247,771 but, in Dublin, the average price at €400,305 was higher than in any other region or county.

In Dublin, Dun Laoghaire-Rathdown was the most expensive with an average price of €563,011 paid for a home while South Dublin was the least expensive, with an average price of €317,655.

After Dublin, the Mid-East was the most expensive region where the average price paid was €247,358 and, in that area, Co Wicklow was the most expensive, at €315,013.

The least expensive region was the border area, where the average price of a home was €116,842. Longford was the least expensive county, with an average price of €88,837.

First-time buyer owner-occupiers purchased almost a quarter of the dwellings, and just over half bought by former owner-occupiers. However, more than one in five (23%) were bought by non-occupiers.

Chief economist with Davy, Conall Mac Coille, said residential property price inflation was now back in double-digit territory for the first time in two years.

“Ireland’s strong economic recovery, the lack of housing supply, the introduction of the Help to Buy scheme, and the loosening of the Central Bank mortgage rules are the likely factors driving the acceleration in house price inflation,” said Mr Mac Coille.

Chief economist with Merrion Capital, Alan McQuaid said there was a housing crisis and, until politicians got their act together, prices would continue to rise.

“In our view, we need some radical thinking on this. We need to start treating houses solely as a place to live and not as an investment asset.

“Government policies, tax or otherwise, need to be geared towards favouring those wanting the house to live in over those who are buying purely for investment purposes.”

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