Dublin house prices rising €6,600 a month

House prices in Dublin have soared by more than €6,600 a month since the start of April, according to a study, as CSO figures show prices to be 24.4% dearer than a year ago.

Analysts blame lack of supply for driving up prices and warn that the current rate of increase poses a challenge to levels of affordability and our economic competitiveness.

The cost of homes nationally rose 12.5% in the year to June, the CSO said, as experts predict nationwide increases of 20% by the end of the year.

A study by estate agents Douglas Newman Good shows that the price of some starter homes in west Dublin rose by 36.6% in the past 12 months.

The CSO figures reveal that residential property prices nationally rose by 2.9% in June alone. This compares with an increase of 1.2% in June of last year.

Davy economist Conall Mac Coille said the residential property market transactions look set to be broadly flat this year at around 1.5% of housing stock.

Property Industry Ireland director Peter Stafford said while rising house prices may be good news for many homeowners, “the speed at which prices are growing is putting pressure on the private rental and social housing sectors”.

The Society of Chartered Surveyors Ireland called for the prompt implementation of measures recommended in the Government’s Construction 2020 Strategy to address the current housing supply shortage.

“Average property prices have increased by almost a quarter since this time last year in Dublin,” said Conor O’Donovan, policy director of the society.

“The current rate of price inflation is of significant concern and poses a challenge to levels of affordability and our economic competitiveness.”

The key issue is the shortage of new properties, Mr O’Donovan said.

“Last year, we built just 8,301 new houses when we should be building up to 25,000 per annum to meet demand.”

He added: “Clearly the pendulum has swung too far in Ireland and we now need a more balanced approach to building houses to meet the needs of our population and economy.”

The CSO figures bear out these concerns. Dublin residential property prices — including apartments — grew by 3.3% in June and were 23.9% higher than a year ago.

The price of residential properties in the rest of Ireland (excluding Dublin) rose by 2.3% in June compared with an increase of 0.7% in June of last year.

According to Douglas Newman Good’s study, house prices in Dublin rose by over €6,600 a month from the end of March to the end of June.

The average cost of a Dublin home now stands at €349,000, a rise of €6,666 per month since the beginning of April, or €71,000 since June 2013.

Houses in west Dublin increased at almost twice the rate of houses in the north and south of the city at 9.6% versus 4.1% and 5.6%, respectively.

Commenting on the results, Keith Lowe, CEO of DNG, said: “Property prices in Ireland fell too far and too fast and it was inevitable that prices in the greater Dublin area in particular were going to rebound strongly. “The fact that property prices in the capital have risen at a more realistic and sustainable level this quarter than that experienced in the first quarter of 2014 is to be welcomed.”