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Thursday 17 October 2019

House prices rise twice EU average amid supply boost

Top of table: Slovenia had the highest house price inflation at 15.1pc
Top of table: Slovenia had the highest house price inflation at 15.1pc

Charlie Weston and Ellie Donnelly

House price rises in this country were the third highest in the European Union between July and September last year.

Prices rose by more than twice the average rate of increase across the EU.

It comes as separate figures show the supply of new housing in Ireland last year was at its highest in almost 10 years.

The EU's statistical agency said house prices in the third quarter of last year rose by 9.1pc in this country.

This compared with an average increase of 4.3pc across the EU.

Only Slovenia and the Netherlands had higher house price inflation. Prices rose by 15.1pc in Slovenia, and by 10.2pc in the Netherlands.

The Eurostat figures are not as up to date as Central Statistics Office (CSO) property data. The latest CSO figures show prices fell in November, in what was the first monthly decrease in months.

Prices were down by 0.5pc in the month, with the cost of an average property €6,000 less than the typical price achieved in the previous month.

Despite the fall in the month of November, prices rose when compared with the same month last year - prices rose by 7.1pc nationally in the year to November.

One of the reasons for the annualised increase in property prices is the shortage of homes for sale. But new figures from Goodbody Stockbrokers show that supply is beginning to catch up.

The supply of new housing in Ireland last year reached a nine-year high of 18,855.

This represents annual growth of 31pc for the full year, and is the largest annual output since 2009, according to the Goodbody 'BER Housebuilding Tracker'. However, supply still remains at half of the estimated demand required in the country.

All regions in Ireland experienced double-digit growth in 2018, albeit from low levels.

The fastest growth was registered in the south-east area of the country, up 49pc year-on-year, but housebuilding continues to be concentrated in the Greater Dublin Area (GDA).

House completions in Dublin shot up by 33pc last year to 7,404. In the Dublin commuter belt housing supply was up by 34pc year-on-year to 3,955.

Combined, the GDA accounted for 60pc of completions in 2018, relative to population share of 43pc.

Chief economist at Goodbody Stockbrokers Dermot O'Leary said: "Viability remains the main constraint to building outside of the main urban areas of the country due to the low level of second-hand prices relative to the cost of delivery."

There was a rapid increase in large housing schemes in 2018, up 45pc in the year to 11,469. This represents 62pc of total completions.

One-off housing represented a further 25pc of new completions last year, and has been relatively stable over recent years, according to the tracker.

Irish Independent

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