Property prices tipped to rise up to 20pc this year
Published 12/07/2014 | 02:30
PROPERTY prices are set to keep rising this year, with double-digit growth expected for the capital.
Increases so far this year mean values are on course to jump by up to 20pc in the capital, a leading economist said.
And across the country as a whole, property price rises of 10pc for the year have been forecast by Alan McQuaid of Merrion Stockbrokers.
He said the official figures from the Central Statistics Office (CSO) showed there was now strong evidence of a recovery in the housing market.
"Based on the figures for the first five months of 2014, we now see an average rise in Irish house prices of around 10pc for the year as a whole, with Dublin posting the biggest increase, of 15pc to 20pc.
"This compares with an average increase in house prices of 1.8pc in 2013, the first positive change since 2007," he said in Merrion's quarterly 'Economic Outlook'.
A chronic lack of family-type homes for sale in urban areas, and Dublin in particular, is driving prices up.
"There is an element of housing froth at the moment which is pricing first-time buyers out of the market," Mr McQuaid said.
Credit availability was also an issue, but this was more down to weak demand than banks' lack of mortgage financing.
"If that is indeed the case, then an improving labour market should see the demand for credit pick up in the coming months, but that is only going to push prices up further if the supply of houses for sale doesn't increase dramatically," the report says.
The prediction of a continued surge in prices comes as figures from the European statistics agency, Eurostat, found that property price rises in Ireland last year were among the highest in the EU.
Prices here rose by 7.8pc in the first three months of this year when compared with the same quarter last year, Eurostat said. Only in Estonia, Latvia and the UK were there higher increases.
A large number of EU countries saw a modest decline in prices, including Cyprus.
The sharp rises are making it more difficult for new buyers to secure a home.
The latest CSO figures show prices nationwide rose by 10.6pc in May, when compared with a year previously. Prices jumped by 22pc in Dublin compared with a year ago.
The surge in values means a house valued at €300,000 in Dublin last year is now worth €366,000.
Calculations by Goodbody Stockbrokers based on the CSO figures indicate that the average property is now valued at €183,000 nationally. This is a rise of almost €18,000 in a year.
In Dublin, the average price is now €242,600, up almost €44,000 in a year.
Outside the capital, prices now average €150,000, up €2,600 since May 2013.