Buyers forced back to market after first price rise since 2008
Published 24/07/2013 | 05:00
BARGAIN hunters are set to cash in after new figures showed property prices have risen nationally for the first time in more than five years.
The surprising surge in prices has prompted hopes that the worst is over for the housing market here, which has endured the second worst collapse in the world.
And a number of economists predicted that there could now be a slow, but sustained rise in prices.
The Central Statistics Office (CSO) said prices rose by more than 1pc in the 12-month period to June.
This was the first annual rise since January 2008.
The first rise since the crash began compares with an annual fall of 14.4pc in the 12 months to June last year.
Experts said that the first annual rise in prices across the country would force buyers who were on the sidelines to enter the market, prompting hopes that a recovery will get under way.
Cagey potential buyers have been holding back waiting for prices to stop falling.
Prices were up in Dublin and nationally. Apartment prices in Dublin surged almost 10pc. But there was a 1pc drop in values outside the capital.
Property values in Dublin and other cities and larger towns have been rising for a number of months, but there was surprise that prices have gone up outside the capital.
In Dublin, residential property prices grew by 1.7pc in June and were 4.2pc higher than a year ago. Dublin house prices grew 1.4pc in the month and were 3.6pc higher compared to a year earlier.
Dublin apartment prices were almost 10pc higher when compared with the same month of 2012. But the CSO warned that its figures on apartments were based on a small number of transactions.
The latest figures mean that the average price of a house nationwide is now €167,000. This is half of what it was at the start of 2008, but up almost €2,000 in the last month alone.
Calculations based on the CSO figures show that Dublin properties are now changing hands at an average of €202,200, down from €430,000 at the peak of the boom.
And properties outside the capital are averaging €148,000 in price, down from €283,000.
Economist at Goodbody Stockbrokers Dermot O'Leary said the rise in prices would force potential buyers to commit. "The return of price growth may trigger cautious potential purchasers into entering the market," he said.
But he warned that that needs to be accompanied by growth in mortgage lending.
Alan McQuaid of Merrion Stockbrokers said there was now a good chance of prices continuing to rise over the calendar year.
Prices had fallen every year since 2007, up to now, he said.
"There is every chance now that if the recent improving trend continues that we could see a very small marginal increase in prices for the year as a whole," Mr McQuaid said.
But the economists warned that the property market was been held back by the reluctance of banks to lend.
And few new houses were being built. Figures from the Department of Environment and local government show that just 3,700 housing units were completed in the first half of the year. For the whole year there was likely to be fewer than 6,000. Mr O'Leary said this level was last seen in the 1960s.
There was a chronic shortage of family-type homes, particularly in Dublin, experts said.
Separate figures from estate agents DNG show that the average second-hand property in Dublin is now worth €279,000.
They said prices were rising due to an improvement in confidence, greater availability of mortgage finance and tight supply of family homes.
DNG said there was an annual house price increase in Dublin of 15pc to the end of June.
DNG's report said that in April, May and June the increase of 4.4pc reflected four consecutive increases in Dublin house price values.
It also said that cash transactions made up more than six-out-of-10 purchases in the first three months of 2013.
DNG chief executive Keith Lowe said the market was on the rise. "2013 appears to be a turning point in the housing market," he said.