Home prices surge over 10% in Dublin
The cost of a house in the capital is up 10.5% in the year to August while the value of apartments is up by almost the same amount.
Official figures show the recovery of the property market has been modest nationally but demand for family homes in parts of Dublin is driving a revival.
The CSO said prices were up on average 0.9% in August and up 2.8% in the year to last month.
The improvement in Dublin is highlighted by a 1.9% jump in values in August alone.
Property prices in Dublin are 53% lower than their peak in 2007, while the fall in the price of homes in the rest of Ireland is 48%.
The price of residential properties outside of Dublin rose by just 0.1% in August compared with an increase of 1.3% in August last year.
Davy chief economist Conall MacCoille said the recovery in house prices is starkly split.
“House price inflation in Dublin is running at double-digit levels for the first time since the recession began, at +10.5%. In contrast, house price inflation outside the capital was -2.5%.
“Clearly, a lack of supply and attractive rental yields have seen cash buyers supporting the Dublin market.
“We know that house transactions in the first eight months of 2013 were up by 13%. However, mortgage lending has fallen back €850m. Cash purchases accounted for almost 60% of housing market transactions. This is not a sustainable form of demand over the longer term. But the presence of cash buyers has clearly put a floor under the housing market.”
Despite the two-tier housing market, Mr MacCoille said the bigger picture is that both house prices and market transactions are slowly recovering, albeit from a very low base, and with the problem of delinquent mortgage debt unresolved.
