House prices will soar to Celtic Tiger levels 'in three years'
A lack of housing stock and government interference are driving property prices back to the heady days of the Celtic Tiger, new figures released today show.
House prices rose nationally by more than 4pc in the first three months of this year, but Dublin is racing ahead of the rest of the country with prices expected to reach peak levels again in three years.
Price inflation in the capital is at 8.7pc already this year, up from 1pc last year.
Economist and author of the Daft.ie House Price Report Ronan Lyons said family homes in Dublin were on course to hit 2006/2007 prices first. He said a lack of new houses coming on stream and a declining number of properties coming to the market were behind the surge.
“If growth continues at the rate we have seen over the last three years, then we will be back at Celtic Tiger levels in the next three to four years.
“The Government might respond and say the Central Bank rules will limit house price growth but they have just relaxed those rules. That will bring at least one year of extra growth. If that continues for the second or third year, then certainly in Dublin you will be back at Celtic Tiger levels.”
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House prices are now at 2002 levels with the national average list price at €230,000, 9.4pc higher than last year.
Housing Minister Simon Coveney said he doesn’t accept the conclusion that the cost of a family home in Dublin will be back to peak prices in the next three years.
Mr Coveney said the Government has “radically” changed policy and funding for housing measures to drive increased supply, pointing to €226m for infrastructure to open up sites for 23,000 new houses — 16,000 in Dublin — among other measures.
However, Mr Lyons has warned we need closer to 50,000 units annually to cope with pent-up demand.