Irish News

Sunday 31 August 2014

Dublin home prices 'pull ahead'

Published 30/06/2014 | 09:42

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The huge gap between house prices in Dublin and the rest of the country is widening further, says a report

The massive gap between house prices in Dublin and the rest of the country is widening further and making it less affordable to live in the capital, a new report warns.

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The latest house price survey from online property website MyHome.ie shows a 4.5% jump in the cost of buying a house in Dublin between April and June this year.

The increase echoes official figures released by the Central Statistics Office (CSO) last week which showed house prices in the capital are rising at their fastest rate since the peak of the property boom.

At the same time, house prices outside Dublin have jumped for the first time since 2006 - up by 1.3% over the same period.

Angela Keegan, managing director of MyHome.ie, described the national rise as a milestone in the property market recovery, but warned the widening gap between house prices in the capital and elsewhere in the country is a cause for concern.

"It's heartening to see asking prices nationally rise for the first time in eight years," she said.

"While this is an important landmark on the road to recovery, we are still much closer to the start of that journey then the finish."

An average house price in Dublin now stands at 255,000 euro.

That's 34% higher than the average asking price for a house anywhere else in the country, at 190,000 euro.

"This is on a par with trends seen at the height of the boom when the difference stood at 35%, albeit prices are at a much lower base," said Ms Keegan.

Given the relatively small number of new house building projects planned for the year ahead, prices will continue to rise in Dublin, she added.

Caroline Kelleher, from DKM economic consultants and author of the report, also warned that the capital will continue to get less affordable for those looking to get a foot on the property ladder.

"Given the time lag in addressing supply issues it is likely prices will continue to rise in these areas for some time to come," she said.

Average house prices in Cork rose 2.7% between April and June, up to 190,000 euro, while in Galway the figure rose 3%, to 170,000 euro. It was the first time since 2007 that prices increased in the western city.

However, prices in Limerick and Waterford continue to drop.

Limerick city saw the average asking price dip 7.7% to 120,000 euro, while Waterford sunk 8% to 115,000 euro.

Last week, a CSO report showing house prices in Dublin have soared more than a fifth (22.4%) over the last year - and 4.4% last month alone - sparked calls for more homes to be built in the capital.

Observers warned that cash-buying investors still make up around half of all property purchases, rather than people seeking a home and who have been able to get a mortgage.

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