Property prices still rising - but at slower pace than a year ago
Published 27/08/2015 | 02:30
Property prices rose again last month, but at a slower rate than the market was experiencing last year.
Prices were up less than 1pc in July, according to the Central Statistics Office (CSO).
When compared with July last year, prices are now 9.4pc higher nationwide.
It was the 26th month in a row that property prices rose countrywide.
In Dublin, prices rose 0.7pc in the month, and are up 9pc compared with the month of July last year. Outside the capital, prices were up 1.2pc in July.
Prices in rural areas were 9.6pc ahead of where they were last year, the CSO said.
But prices are still down on where they were before the economic downturn hit. When compared with the peak of the boom in 2007, prices are still down 37pc nationwide.
The average price for a property is now €210,000, according to calculations based on the CSO figures by Goodbody Stockbrokers. This is up €22,000 since last year. But it is down €123,000 from the peak in 2007.
For Dublin, the average price is now €280,600, up almost €30,000 in a year.
Outside the capital, properties are changing hands at an average price of €171,000, up €17,000 in a year.
Economist with Goodbody Stockbrokers Dermot O'Leary said that with low levels of homes for sale and demand expected to outstrip supply for a while, house price inflation will pick back up in 2016.
Economist with Merrion Stockbrokers Alan McQuaid said tough lending rules imposed by regulators were slowing price rises.
"One has to assume that the tighter lending restrictions imposed by the Central Bank and the end of the capital gains tax property purchase incentive scheme, as announced in last October's Budget, is weighing negatively and will bring prices down to more affordable levels," he said.
He added that the recent sharp increase in planning permissions should also dampen house prices.
A lack of supply of houses to buy has been pushing up prices, especially in Dublin.
Over the next few months prices should continue to rise at a modest level due to higher economic growth, despite the lending restrictions.
Economist with Investec, the specialist bank, Philip O'Sullivan said prices would keep rising as there were some 19,000 households being formed every year, with just 11,000 properties being completed.
Property Industry Ireland (PII), the Ibec group that represents property firms and the construction sector, said the slowdown in prices was caused by the Central Bank mortgage lending policies.
Peter Stafford of PII said the rapid increase in rents in the same period suggested that potential purchasers were trying to raise deposits or were buying outside of the capital where prices were lower.
"A complete review of Irish housing policy is urgently needed. A comprehensive long-term policy is required to address the needs of renters and their landlords, owner-occupiers and those faced with the threat of homelessness," he said.