Capital property market soaring
Published 23/01/2014 | 11:42
The price of property in Dublin soared by 15.7% last year, official figures have revealed.
The market in the capital was up 0.3% in December, a slowdown to rates seen around April, while the price for an apartment went up 20.8% over the 12 months.
And confirming the massive gulf in the two-tier property market, the Central Statistics Office reported that outside of the capital the market increased by 0.1% last month but was down 0.4% over the last year.
The official report from the property price register backs up figures showing a resurgent market in Dublin from leading estate agents and also websites like daft.ie.
The online property site said it had recorded an increase of 11% in the market in Dublin last year.
The Society of Chartered Surveyors Ireland yesterday a report citing similar figures to the CSO but rating agency Standard and Poor's (S&P) warned that the bounce in the market will slow in 2015 as the issue of mortgage arrears will persist.
Despite the big recorded jump in the price of an apartment in Dublin, the CSO warned that its figures were based on very low volumes of sales.
However, the market for houses alone is up 15.3% over 2013 - a level of growth not seen since the year before the 2007 crash.
Leading estate agency Savills Ireland warned that the price increases would continue until supply starts to meet demand in the capital.
"At the moment this is not happening for a number of reasons, such as planning barriers set down by some development authorities and the restricted availability of development finance," Graham Murray, the agency's head of residential, said.
Mr Murray warned that actual growth could be higher then the CSO has recorded, an issue raised repeatedly by industry chiefs during 2013.
"The increase in residential property prices is based on mortgage financed transactions. It does not include cash funded deals which represent a significant proportion of activity, particularly at the higher end of the market," Mr Murray said.
Savills said 25,000 additional housing units - with priority on family homes - should be built each year to offset depreciation of existing housing stock and to meet demand from a growing population.
Davy stockbrokers forecast that annual house price inflation will accelerate to 9% by March.
It warned that cash buyers account for half of the 5.8 billion euro spent in the market last year and it said the growing gap between mortgage approvals and actual lending is indicative of the lack of supply in urban areas such as Dublin pushing up on prices.
Davy also said it expects to see voluntary sales and repossessions rise for homes in mortgage arrears.