Tuesday 25 July 2017

Property prices up 7pc in a year, with no let-up in sight for 2017

Austin Hughes, Chief Economist for KBC Bank Ireland. Photo: Gerard McCarthy
Austin Hughes, Chief Economist for KBC Bank Ireland. Photo: Gerard McCarthy
Charlie Weston

Charlie Weston

Property prices continue to rise nationwide as a lack of homes for sale keeps the pressure on buyers.

Experts said prices would keep rising next year.

New figures show that prices rose an average of 7.1pc in the year to October.

This compared with an increase of 7.6pc in the year to September, the Central Statistics Office said.

In Dublin, residential property prices increased by 5.5pc in the year to October.

The highest house price growth was in Dublin City, at 7.5pc. In contrast, the lowest growth was in Fingal, with house prices rising just 3.4pc.

Residential property prices outside Dublin were 10.2pc higher in the year to October.

The midland region showed the greatest price growth, with house prices increasing 16.6pc.

Apartment prices outside of Dublin increased by 9.3pc in the same period.

Property prices nationally are now close to 33pc lower than the peak reached in 2007.

In October, the average price paid for a new residence was €250,147.

The CSO said the average market price paid by households over the year - which was seen as a more stable measure of price - was €235,750.

In the year to October, the average price paid for a home was higher in Dublin than in other areas. Statisticians said the average price was €386,657.

Austin Hughes, an economist with KBC Bank, said the slight easing in the annual rise in October did not mean prices would now fall back.

"We don't think this signals the start of a notably more moderate trend in property price inflation as the introduction of the Government help-to-buy scheme and the slight easing recently announced in the Central Bank's lending limits should further boost property purchasing power at a time when new building is still falling well short of potential demand," he said.

Alan McQuaid, of Merrion Capital, said a lack of supply of houses had pushed up prices, particularly in the Dublin area in the past three years.

He said this was not something that could be rectified overnight.

"Until this issue is addressed, prices in the capital and its outskirts will likely remain elevated, even with Brexit-related risks," he said.

Mr McQuaid expected rises of between 6pc and 8pc next year.

Davy Stockbrokers' Conall Mac Coille said residential property price inflation now looked set to equal 8pc for the full year.

And he said he would now be forced to revise upwards a forecast that prices would rise by 7pc next year.

From the trough in early 2013, prices nationally had increased by 48.4pc.

In Dublin, residential property prices had increased by 64.7pc.

The Economic and Social Research Institute (ESRI) warned earlier this week that the economy ran the risk of overheating next year due to the upsurge in residential construction projects.

The State-funded economic think-tank expected up to 18,000 homes to be built next year. That is the largest amount in almost a decade, back when property prices peaked.

Such a figure was set to be well below the 30,000 needed to meet demand.

However, the ESRI feared the building of even 18,000 housing units could push the economy close to full capacity, potentially driving up wages and eroding competitiveness.

Irish Independent

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