Apartment prices in Dublin rose 11.6% in the year to July while house prices increased by 7.5% over the same period, according to figures released yesterday by the CSO.
The disparity is growing between property values in Dublin and those elsewhere, especially in rural areas where prices have continued to fall since 2008.
Some areas of Dublin are on the cusp of a new boom in property prices, according to analysts.
John McCartney, director of research at Savills Ireland, said the rise in parts of the capital is being grossly underestimated by the CSO.
“By omitting cash deals and lagging real-time developments by around three months, the index almost certainly understates the true extent of house price increases in the Dublin area,” he said.
“Agents on the ground are reporting price increases of up to 20% in some prime residential neighbourhoods in south Dublin.”
According to the CSO, residential property prices in the rest of Ireland (excluding Dublin) fell 0.1% in July from June. Year-on-year prices were 1.5% lower than in Jul 2012.
Philip O’Sullivan, chief economist with Investec Ireland, said the data is further proof of the “two-tier narrative” playing out in the housing market.
“The ‘national excluding Dublin’ component of the [study] recorded a 0.1% month-on-month decline in prices during July, leaving them -1.5% year-on-year, continuing a sequence of annual declines stretching back to Feb 2008,” he said.
“Within the capital, however, the data tell a very different story. Residential prices in Dublin rose sharply during July on both a month-on-month (+3.3%) and year-on-year (+8%) basis, led by house prices which were up 3.6% month on month and up 7.5% year on year.”
The CSO’s Residential Property Price Index reveals that the Dublin effect has skewed the national figures: In the year to July, residential property prices nationally rose by 2.3%. This compares with a fall of 13.6% recorded in the 12 months to Jul 2012.
On a monthly basis, residential property prices nationwide, including Dublin, grew 1.2% in July. This compares with an increase of 0.2% in Jul 2012.
In Dublin, residential property prices grew by 3.3% in July from June and were 8% higher than a year ago. Dublin house prices grew 3.6% in the month and were 7.5% higher compared to a year earlier. Dublin apartment prices were 11.6% higher when compared with the same month of 2012.
The CSO said the statistics for apartments are based on low volumes of observed transactions and consequently suffer from greater volatility than other series.
Mr O’Sullivan said the disparity in the figures reflects higher rental yields, a tighter supply of properties and a superior economic outlook in Dublin compared to the rest of the country.
“Looking ahead, we continue to see our two-tier narrative playing out, with the still high inventory levels continuing to act as a barrier to a sustained improvement in rural house prices over the coming months.”
There are some sobering figures for Dublin, however. The CSO revealed that house prices in the capital are 52% lower than at their highest level in early 2007. The fall in the price of residential properties in the rest of Ireland is somewhat lower at 48%. Overall, the national index is 49% lower than its highest level in 2007.
*With offers of college places being received today, the Private Residential Tenancies Board yesterday revealed that levels for student accommodation varies widely across the country.
Students outside the capital fare better, with a three-bed semi in Maynooth typically costing €936; and a three-bed in Athlone costing €605.
A two-bed apartment close to Tralee Institute of Technology will cost €535; the same apartment in Galway city averages €791; or in Limerick a two-bed apartment will set you back €552 per month.