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Tuesday 16 September 2014

Now property prices begin to stabilise in cities outside capital

* Market holds steady in Limerick and Galway - Still evidence of deep urban-rural divide

Published 30/09/2013 | 04:00

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PROPERTY prices are stabilising in cities outside of Dublin, with the market holding steady in Limerick, Clare and Galway over the past three months.

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But despite the signs that these three biggest markets outside the capital are on a more sound footing, there is further evidence of a deep split between town and country.

A new report from Myhome.ie today shows that the asking price on average for all properties in the capital is now 26pc above the €191,000 national average, at €240,660.

And while the survey says that prices in Dublin were almost 1pc higher in the third quarter, prices fell 1.4pc on a national basis.

That brings the annual national rate of decline in property prices to 7.8pc.

While still high, it's significantly down on the 14.3pc annual national rate of decline that was recorded this time last year.

Overall, the price of houses and apartments is still 53pc lower than when they hit their peak in late 2006 and early 2007.

Although prices are still falling across the country, urban areas are stabilising.

The report shows that in the first nine months of this year, the median asking price for homes in Cork city has remained unchanged at €195,000.

In Limerick city and Galway city, prices also remained unchanged in the past quarter.

"The fact that prices have remained unchanged in Cork city for three quarters is encouraging while prices are also stabilising in Galway and Limerick city.

"However, it's clear the focus will remain on stock levels for the foreseeable future," said Angela Keegan, the managing director of Myhome.ie.

But the author of the report, Caroline Kelleher of economic consultancy firm DKM, said the latest figures also highlighted that the two-tier market that exists between Dublin and the rest of the country is continuing to widen.

There have been fears that a housing bubble is emerging among second-hand Dublin homes, with prices for houses and apartments in the capital having soared by 10.6pc in the past year. Prices in the Dublin area have risen every month so far in 2013.

That's been fuelled by a lack of new housing stock and the low number of existing homes up for sale. Myhome.ie said there were only 3,800 residential properties currently for sale in Dublin, down from 5,000 a year ago.

The fewest number of homes since records began to be kept in 1970 – just about 6,000 – will be built in Ireland this year.

But it is reckoned that the country needs about 20,000 a year to keep up with the demands of a rising population.

Ireland's population is expected to grow by about 10pc in the next 15 years from the current 4.6m level.

There are currently about 1.99 million dwellings in the country and it is estimated that a total of 2.44 million is required.

Irish Independent

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