House prices outside capital rise for first time since 2008
Published 28/02/2014 | 02:30
THE recovery in property activity has spread outside Dublin for the first time in six years, fuelling predictions that the market is finally on the road to recovery.
New figures show that prices rose in and around the capital, with houses and apartments also rising in price in all regions when compared with last year.
This was despite a slowdown in the pace of property price rises in the Dublin market, according to the Central Statistics Office.
Across the State, prices were up 6.3pc in January when compared with the same month a year ago. In Dublin, prices rose 13.6pc over the previous year, with a rise of 1.2pc outside the capital.
It was the first increase in prices in the rest of Ireland since the start of 2008.
This was hailed as a landmark by economists.
Philip O'Sullivan of specialist bank Investec said there was still a two-tier housing market, but rural towns and villages were finally seeing some growth.
"The retail property price index release is something of a milestone in that it heralds the spread of the recovery in prices seen in Dublin last year to other areas of the country," he said.
And Goodbody's Dermot O'Leary and Juliet Tennent now expect prices to keep rising across all regions this year, as the recovery takes hold.
Ms Tennent said: "Outside the capital there is evidence that the stabilisation continued with monthly price changes flat for the third consecutive month, resulting in an increase of 1.2pc year-on-year.
"This represents the first annual increase in property prices outside Dublin since February 2008," Ms Tennent added.
Alan McQuaid of Merrion Stockbrokers said he expected prices nationally to rise 6pc this year, with a 10pc jump in Dublin.
He said the pick-up in the housing market has been quicker and more sustained than he had expected.
There was an overall increase in house prices in 2013 for the first time in six years, when most analysts were talking about another year of decline at the start of last year, he added.
Mr McQuaid called on banks to return to normal lending, as half of all house purchases were still for cash.
The monthly changes saw price falls of just less than 1pc in January. This was the first monthly fall since March.
In Dublin, residential property prices fell by 1.3pc in January, when compared with December.
Economists said January was traditionally a poor month for housing sales, while the storm conditions across the country would have impacted on the market.
The latest price changes mean that the average property price nationally is now €117,300, according to calculations by Goodbody Stockbrokers.
This is up €10,500 in the past year, but almost half of the peak price at the start of 2007.
For Dublin, the average property has gained €27,000 in value in the last year, to €227,000.
Outside the capital the average property is changing hands for €151,000, a fall of €1,700 over the last year.