House prices rise in commuter belt
Figures released yesterday by the Central Statistics Office revealed that residential property prices rose by 16.2% in the year to November, compared with an increase of 16.3% in October and an increase of 5.6% recorded in the 12 months to November 2013.
,Month on month, residential property prices rose by 0.5% in November compared with an increase of 2.9% recorded in October and an increase of 0.6% recorded in November of last year.
However, while prices in Dublin fell in the last month, November saw the strongest rate of price growth outside the capital since June 2007.
Dublin residential property prices fell by 0.1% in November and were 22.4% higher than a year ago. Dublin house prices fell by 0.1% in the month and were 22.2% higher compared to a year earlier.
Apartment prices in the capital were 26.8% higher when compared with the same month of 2013.
The price of residential properties in the rest of Ireland rose by 1.2% in November compared with no change in November of last year and overall prices outside the capital were 9.6% higher than in November 2013.
Reacting to the publication of the CSO figures, Dr John McCartney, director of research at property consultants Savills, said it was evidence that price growth in Dublin is beginning to soften in contrast to outside the capital, where prices have been rising at an increasing rate for the last seven months.
Dr McCartney said that the contrasting trends reflected the displacement of demand from Dublin to the commuter counties.
“For the last two years, cash sales have driven very strong price growth in Dublin. However, with cash buyers becoming scarcer, the traditional mortgage-financed buyer has once again become the mainstay of the market.
“However, tight bank lending and the price growth that has been experienced in Dublin over the past two years mean that affordability is becoming an issue for these buyers,” he said.
“It is inevitable that this dynamic will cause buyers to look again at properties in the commuter belt, and this is what is driving the continued strong price growth outside Dublin.”
While prices have risen year-on-year this year, they are still at a fraction of the peak in early 2007. House prices in Dublin are 35.8% lower than at their highest level in early 2007, while apartments in the capital are 44.3% lower than they were in February 2007.
The price of residential properties in the rest of Ireland is 41.8% lower than their highest level in September 2007. Overall, the national index is 37.9% lower than its highest level in 2007.
