Wednesday 16 October 2019

House price surge is no longer driven by the capital

Photo: Stock
Photo: Stock
Charlie Weston

Charlie Weston

Areas outside of Dublin are now driving massive property price growth with some locations seeing annual rises of over 20pc.

The mid-west region, which is mainly Limerick, showed the greatest price growth, with house prices increasing at almost double the national average, at 22.1pc.

The Central Statistics Office (CSO) said that property price rises have eased a bit, but are continuing to increase at double-digit rates.

Prices at national level increased by 12.4pc in May compared with last year. This is a slight slowdown on the increase of 13.5pc in the year to April, according to the CSO.

The figures show slower rises in residential property prices in Dublin. In the year to May they were up 10.7pc, compared with a rise of 13pc in April.

Prices outside Dublin were 14.1pc higher in the year to May.

The Border region showed the least price growth, with house prices increasing 3.7pc.

Overall, the national index is 20.4pc lower than its highest level in 2007. Dublin property prices are 22.5pc lower than their February 2007 peak, while prices in the rest of Ireland are 25.5pc lower than their May 2007 peak.

The average price paid for a property nationally was €280,000 in May, up €17,000 on a year ago. Dublin had average prices of €439,000 in May, a rise of €23,000 on the year.

The CSO said that 20pc of the residential properties bought in May were for new dwellings.

Captured for the first time is a breakdown of the properties purchased by homeowners and what is called the non-household sector - this comprises private companies, charitable organisations and state institutions. Last year there were 52,128 properties bought for €14bn across the entire market.

The non-household sector accounted for 8,766 of these purchases, or around 16pc.

Economist with KBC Bank Austin Hughes said the slight easing in house price inflation could mark the beginning of a move to a more sustainable pace of increase. But the shortfall in supply and a backlog of unmet demand mean this process could be a lengthy one.

Last month Central Bank governor Philip Lane said he expected property prices to "cool off" over time as supply increases. But he warned that continuing "strong fundamentals" were continuing to push up prices.

David McNamara of Davy Stockbrokers said the new figures suggest that Central Bank rules on mortgage lending are beginning to constrain prices.

He said mortgage approvals data has been pointing to a moderation in price inflation.

In May, the average mortgage approved was €236,700.

Irish Independent

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