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House prices still rising but at slower pace - report

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HOUSE prices are continuing to rise, but at a slower pace.

And prices are expected to keep increasing over the next few months, according to an analysis with the latest survey results from MyHome.ie. 

The average asking price nationally is now €198,000.

Asking prices rose by 2.2pc in the first three months of the year. This takes the rise for the past 12 months to 5.7pc.

Dublin asking prices were up 2.5pc in the first quarter, and are now almost 13pc up over the past year.

The asking price for a house in Dublin is now €276,000.

Analysing the MyHome.ie figures, economist with Davy Stockbrokers Conall Mac Coille said the moderation in property price inflation was positive.

Price rises were slowing down, but this does not mark a period of sustained declines.

Mr Mac Coille said a mix of factors probably explains the recent moderation in house price growth.

He said affordability was becoming stretched in Dublin.

And the Central Bank’s new lending rules may have reined in exuberant price expectations.

“Thirdly, the end of capital gains tax exemptions may have inflated demand mid-year, leading to price falls towards the end of last year,” the economist said.

Mr Mac Coille believes population increases and supply constraints will support prices in the coming months.

“Housing completions were just 11,000 in 2014, less than half of the estimated natural demographic requirement of 25,000 per annum.

“A worrying development is the collapse in the Irish construction PMI survey earlier this year and anecdotal evidence which suggests that few additional new projects are coming on stream,” the economist said.

The lack of new supply and population growth will help support prices, particularly in urban areas such as Dublin, he said.

Angela Keegan from MyHome.ie said the latest transaction data shows a significant increase in the first two months of the year.

The property price register indicates there have been 6,650 property sales so far in 2015, Ms Keegan said.

The number of transactions was up 44pc in the first two months of 2015 when compared with the same period of 2014, while mortgage approvals of €357m in January are up 66pc on the corresponding 2014 figure, she said.

Online Editors