Property prices increase nearly 8%: CSO

Residential property prices increased nearly 8% in the year to March, with Dublin property on average costing 14.3% more than a year ago.

The figures published yesterday by the CSO also indicated that house prices are stabilising somewhat — nationally property prices fell by 0.7% in the month of March and remained unchanged that month.

The figures in the CSO’s Residential Property Price Index also highlight the contrast between the average cost of property in the capital against the rest of the country.

The price of residential properties in the rest of the country, excluding Dublin, fell by 1.6% in March, and prices were 2.9% higher than in March of last year.

Even though property prices have increased over the past 12 months, particularly in Dublin, they are still far removed from the peak prices of the boom years.

In Dublin, house prices are 48.3% lower than at their highest level in 2007, while apartments are more than 55% cheaper than the average price sought in February 2007.

At a national level, residential property prices are 47% lower than 2007 levels.

Economist with Davy Research, Conall MacCoille, said the figures show property price inflation appears to have slowed in Q1 2014, but it was more likely due to a lack of supply rather than an increase in mortgage lending.

“Today’s residential property price data suggest that house prices are falling back in Q1 2014. House prices fell 0.8% in March, up 7.6% on the year. Overall, house prices declined by 0.5% in Q1 2014, following a 3.7% rise in Q4 2013,” he said. “So there appears to have been some slowdown in the rate of house price inflation.”

He said 10,600, or 36%, of transactions in 2013, occurred in the final quarter of the year while there were 6,304 transactions in the first quarter of this year, up 30% from the 4,852 in the first quarter of 2013.

However, he said transactions in the first three months of this year represented just 1.3% of the housing stock.

“The bigger picture is that housing market activity remains at exceptionally low levels, indicative of the lack of new housing supply and construction activity,” he said. “This is bad news for Irish banks struggling to stabilise mortgage lending and competing for new business.”

* See the full Residential Property Price Index at www.cso.ie