Wednesday 26 April 2017

Property prices rise at fastest pace in the EU

House price rises in Ireland increased by more than six times the EU average in the first three months of this year
House price rises in Ireland increased by more than six times the EU average in the first three months of this year
Charlie Weston

Charlie Weston

House price rises in Ireland were the highest in the European Union last year.

They increased by more than six times the EU average in the first three months of this year.

The annual rise was close to 17pc in the three months to March compared with the same quarter last year.

This was the highest rise in the EU, according to the Eurostat House Price Index.

The EU statistical office said the surge in prices here was despite prices actually falling in the three months to March.

Sweden had the next highest rise in prices, at 11.6pc in the year to March, followed by Hungary at close to 10pc.

The largest falls were seen in Latvia, with prices there down by 5.8pc; in Italy, where they fell by 3.3pc; and in France, where prices slipped by 1.6pc.

Across the EU as a whole, prices only rose by 2.5pc, considerably less than the 16.8pc rise here in the first quarter, as compared with the same three months in 2014.

However, a number of more recent property price surveys have shown price increases have eased in Dublin, but continue to increase outside the capital.

Figures from the Central Statistics Office, Sherry FitzGerald, and Daft.ie all show that lending restrictions put in place by the Central Bank are causing property prices to taper off.

An easing in property price rises is good for buyers, but it is bad news for existing homeowners, many of whom are still in negative equity - meaning the size of their mortgage is greater than the property's value.

Meanwhile, mortgage arrears figures for the six main domestic banks show lenders continue to slowly deal with the issue. This is despite a fall in the numbers behind on their home-loan payments.

There was a fall of close to 1,500 in the number of mortgage accounts at the six banks that are more than three months in arrears, according to figures from the Department of Finance. There are now 55,618 accounts that are more than 90 days in arrears.

However, a third of those in arrears are more than two years behind on their payments, a total of 28,889 accounts.

Banks have restructured 16,349 mortgage accounts that were more than 90 days in arrears, but have yet to sort out close to 40,000 accounts.

This means that seven out of 10 of those that are more than three months in arrears have yet to have their repayments restructured.

The figures were published as groups welcomed a recommendation from the Oireachtas Justice Committee that the bankruptcy term be reduced from three years to one.

The Free Legal Advice Centres, the Association of Personal Insolvency Practitioners and the Irish Mortgage Holders Organisation agreed with the recommendation.

Irish Independent

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