Warning Dublin ‘may become enclave of rich’ as house prices rise

The latest house price trends could see Dublin becoming an enclave for the rich, an economist has warned.

Warning Dublin ‘may become enclave of rich’ as house prices rise

Trinity College assistant professor Ronan Lyons, author of the latest Daft.ie report, said lower-income households could become priced out of the market unless building costs are reduced and Central Bank mortgage rules are relaxed.

His warning comes in his analysis of the latest house price figures for the second quarter of the year.

However, he said there are signs of a slightly healthier housing market, with a slight rise in the number of properties actively on the market, for only the second time in five years, and higher house sale prices compared to the initial asking prices.

The report shows largely stable prices in Dublin but rising steadily elsewhere.

“Coupled with a similar picture last quarter, this represents the closest to healthy the market has been since the start of the decade,” said Prof Lyons.

Dublin’s house price growth of 1.1%, the fourth consecutive quarter where the annual change is less than 3%, is further proof of an improving market, he said. This happened under the Central Bank’s new minimum deposit and loan-to-income restrictions, which Mr Lyons said were a move in the right direction.

The report shows the strongest house price growth in capital’s previously ‘unfashionable postcodes’ such as Dublin 10 (Ballyfermot), Dublin 12 (Crumlin and Walkinstown), Dublin 17 (Balgriffin) and Dublin 24 (Firhouse and Tallaght).

Price falls were recorded in five of the most expensive areas of the city — Dublin 2, Dublin 6, Dublin 16, Dublin 18 and South County Dublin.

Meanwhile, a MyHome.ie survey has found the average asking price for houses jumped by 5% nationally.

The asking price for a new house is now €231,000, while in Dublin it is €326,000, an increase of €11,000 for both on the first quarter of the year.

Angela Keegan, managing director of MyHome.ie, said sharp price gains outside of Dublin showed the recovery was gaining real traction around the country. However, she said the low level of transactions was a concern.

“Galway was a standout performer in Q2 with median asking prices in the city rising by 11% to a fresh high of €226k, while prices in the county rose by 5.7% to €185k,” said Ms Keegan.

“In Cork, the median asking price rose by 7.5% to a fresh high of €215k, while in the city, there was a 6.7% gain to €230k.

“Many counties are now seeing high-double-digit annual gains in the price of three-bed and four-bed houses in the range of 10-20% while the median asking price of a four-bed semi rose in 19 of the 26 counties.”

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