Property prices show 6% increase
Property prices are up more than 6% over the last year with continued evidence that supply cannot meet demand in some parts of Dublin.
According to the Central Statistics Office (CSO), the property market in the capital is up 15% over the last year with house prices jumping 2% last month.
In October, the value of homes nationwide increased 1.8%, the same as in September, while lack of supply and popularity of some areas in the capital pushed prices up there by 2.3%.
Ronan Lyons, economist with Daft.ie, said the figures are not a complete surprise.
"People are going to worry. No-one would argue we are in a bubble, that is a credit issue. It's a one-off backlog in demand so we need a one-off glut of property or development to meet that," he said.
Mr Lyons backed calls for tax incentives to release unused zoned sites or get empty-nesters to trade out of their houses.
The residential property price index found that house prices in Dublin are 48% cheaper than the peak in early 2007 and outside the capital the market is down 47%.
Over the last 12 months apartment prices have seen some of the strongest revivals, up 18%, although experts warned there have only been low volumes of sales in the sector and figures are subject to volatility.
The Society of Chartered Surveyors Ireland noted a 7% fall in the number of transactions in Dublin from September to October - only 4,051 new mortgages were drawn down in the period June to September.
Simon Stokes, of the society, said shortages were driving prices.
"The CSO figures do not include cash sales which currently make up approximately 60% of the market. It's likely that prices have increased by more than the average in certain locations," he said.
Property Industry Ireland (PII), which represents businesses in the sector, rejected suggestions in recent weeks that Dublin was at the start of another housing bubble.
PII director Dr Peter Stafford said the rapid price hikes seen in parts of the capital is what happens when there is a lack of property for sale.
"The further 2.3% house-price increases seen in Dublin in October do not point to a bubble, nor do they point to the emergence of a bubble, but they do show what happens when there is a shortage of property, especially in Dublin," he said.
Dr Stafford called for a strategic approach to where property is built to meet supply and avoid another bubble.
He also warned Ireland was seeing a two-tier market between Dublin and the rest of the country.
"This makes it even more important that the supply and demand pattern in each city and county is understood and analysed properly so that reforms can be made to make sure they do not fall into the supply-side problems which Dublin is facing," he said.
Davy stockbrokers warned against hype around the revival in prices.
"As we have discussed in previous reports, a lack of supply in the capital is now supporting house prices, with an influx of cash buyers compensating for weak mortgage lending and perhaps bidding up the remaining mortgage-backed buyers covered by the CSO index," it said.