Average house prices ‘up 15% every year for last decade’
House prices in Ireland have risen by an average of 15% every year for the last decade, according to figures published today by the Economic and Social Research Institute (ESRI) and Permanent TSB.
In their latest house price report, the two groups say prices have risen by 270% over the past 10 years, with the average house now costing €280,000, compared to just €75,000 in 1996.
Prices increased by a massive 30% in 1998 alone.
The ESRI and Permanent TSB say the average difference between the cost of a house in Dublin and one outside the capital was just €10,000 in 1996, but this has now risen to €130,000.
Homes in Co Wicklow recorded the biggest growth (310%) while Roscommon experienced the lowest (195%).
“We have been through an extraordinary decade in the Irish housing market,” said Permanent TSB's head of marketing Niall O’Grady.
“For many that decade has been challenging in the extreme – particularly for those trying to get on to the property ladder.
“For others – including many ordinary home owners – it has brought significant opportunity and promise and for others it has been very lucrative,” he added.
Mr O’Grady attributed the property boom to low interest rates, shifting population trends and the economic success.
“In isolation any of these elements would have supported a strong housing market. Together they created the circumstances which have led to the exceptional growth in prices we have become familiar with.”
However, he cautioned that price hikes could not continue as they have done over the past decade and predicted a so-called soft-landing in the property market.
Price growth is likely to be in single digit percentage figures for a number of years to come, he said.
Permanent TSB forecast that the average price of a home would rise by around 10% this year.
Joan Henry, of estate agents Hamilton Osborne King, said that its figures showed an even sharper rise of around 400% in some sought-after locations of Dublin over the last decade.
“The figures we have show that in prime areas – like Dublin 4, 6, Clontarf, Malahide and parts of Dublin 9 – there has been a 50% increase in the last two years and about 400% over the last ten years when you zone in on those particular areas.”
She insisted that nowhere in the market were prices tailing off but that smaller price hikes in one and two-bedroom apartments were bringing the average down.
However, she agreed that with expected interest rate increases totalling 0.5% in the autumn and winter the market will slow down.
“What we want to see is a more sustainable growth rate of less than 10%,” she said.
In 1998 – the year Sorrento House in Dalkey made national headlines and signalled the magnitude of the property boom by selling for a completely unexpected €7.2m – average house prices nationally grew by a massive 30%.
While the average size of a property has increased outside Dublin there has been no change to the size of a typical home in the capital since 1996.
The figures were published in a special Permanent TSB House Price Index report, compiled in association with the ESRI, to mark its tenth year recording house prices changes in Ireland.
Sinn Féin Housing spokesperson Arthur Morgan TD accused the Government of facilitating the increase in house prices.
“The Fianna Fáil – Progressive Democrat Government must take the responsibility for facilitating the increase in the price of housing,” he said. “They must introduce measures to stop speculators buying up massive land banks and driving up house prices.
“The failure to seriously tackle the social housing waiting list, which now stands at just under 44,000 families, has also contributed enormously to obscene prices.”
