Property prices are still going up, and at a faster rate, especially in Dublin, according to the most recent Residential Property Price Index.
In the year to October, residential property prices increased 16.3% nationally, compared with an increase of 15% in September and an increase of 6.1% in the 12 months to October last year.
The index, published by the Central Statistics Office, shows that residential property prices rose by 2.9% last month, compared with an increase of 1.8% recorded in September, although some experts have said the rate of growth is likely to slow in 2015.
In Dublin the rise is even more pronounced, with residential property prices increasing by 3% in October — they are now 24.2% higher than a year ago.
Dublin house prices rose by 3.3% in the month and were 24.1% higher compared to a year earlier.
In the rest of Ireland, outside of Dublin, residential property prices rose 2.8% in October and are now 8.3% higher than they were a year ago.
However, residential property prices in Dublin are 37.8% lower than at their highest level in February 2007 while residential properties in the rest of the country cost 42.5% less than their highest level in September 2007.
However, property consultants, Savills Ireland, said the changing profile of buyers was likely to lead to a slowing in the rate of price growth in the market next year.
Savills pointed out that trading was naturally slower in August and that a scaling-back of investor demand was likely to lead to a slowdown in prices.
John McCartney, the director of research at Savills Ireland, said: “Over the past two years, strong demand from cash-rich investors — who have been willing to pay more due to capital gains tax (CGT) incentives — has fuelled sharp house price growth.
“However, falling yields have caused investor demand to halve over the last 12 months, and this trend will accelerate in the new year with the withdrawal of CGT incentives for investors. This should contribute to slower and more sustainable price growth in 2015 as the market again becomes dominated by mortgage-constrained owner-occupiers.”
He also welcomed government plans outlined in the social housing strategy announced yesterday, but said the required level of housing needed could only be fully rectified by private sector development.
Merrion economist Alan McQuaid said the shortage of houses, particularly in Dublin, was pushing up prices.