Property prices soared by 12.5% in the last year and increased by as much as 17% in some parts of the country.
According to the latest property price index from the Central Statistics Office (CSO), residential property prices nationally rose by 12.5% in the last 12 months.
This compares with an increase of 12.2% in the year to December and an increase of 8.8% in the 12 months to January 2017.
In Dublin, property prices increased by just over 12% in the year to December. House prices in the capital increased by 11.4%, while apartment prices jumped by 15% in the same period.
The highest house price growth was recorded in Fingal at 14.2%. The lowest growth was in Dún Laoghaire-Rathdown, where house prices increased 9%.
The greatest price growth was recorded in the West of Ireland at 17.2%, while the South-East region showed the least price growth, with house prices increasing 9.9%. Residential property prices in the rest of Ireland (excluding Dublin) were 13% higher in the year to January.
Overall, the national index is still some 22.3% lower than its highest level in 2007.
Director of financial services with Brokers Ireland, Rachel McGovern, said such a rapid level of price growth “will leave a whole generation of young people less well off in the second half of their lives”.
She pointed out that home ownership rates had dropped to 67% from a high of 80% in 2016, while total housing stock grew by a mere 8,800 (0.4%) in the same period.
“While some may hold the ideological view that says we’re moving on as a nation by not being so wedded to home ownership, as financial planners we seriously challenge such thinking in an environment where people are paying rents that outstrip mortgage payments in most parts of the country, and considerably so in many instances,” she said.
Ms McGovern said that while the building of new homes was increasing from an extremely low base the supply shortage is acute, leading to both increased house prices and rents.
“Putting it bluntly, the supply issue requires an emergency response from decision-makers,” she said.
Director of research at Savills, John McCartney, predicted that house prices would continue to rise for around the next five years but that from the middle of the year growth rates would slow “considerably”.
“While the rate of growth can and probably will be tempered, the growth itself is unstoppable for now because of market fundamentals. There are simply too many bodies chasing too few beds. And despite the best efforts of many, we are playing catch-up in terms of building the number of homes needed and this is going to take time,” he said.
Mr McCartney said prospective homeowners could take solace from the likelihood that the double-digit growth being experienced now would be temporary.
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