Housing shortage to drive up prices by 15pc over the next three years
House prices are set to rise by 15pc over the next three years, a survey conducted by the Central Bank has found.
The survey of estate agents, auctioneers, economists and surveyors indicates prices will rise by eight per cent nationally this year.
Dublin prices are set to rise by 10pc, the property professionals told the surveyors when their views were canvassed in July. A shortage of properties for sale is the driving force for the price growth.
Central Bank mortgage lending rules are no longer holding back prices, the property experts told the regulator.
Strict lending rules had previously been seen as a constraint on the market.
But at the start of the year, the Central Bank relaxed the rules to allow first-time buyers to get mortgage approval with a deposit of just 10pc.
Some 93pc of respondents expected price rises over the next year.
The survey indicated market professionals have revised up price expectations.
At the start of the year, they expected Dublin prices to be eight per cent higher in 2017, but now expect rises of 10pc in the capital.
For the first time, 100pc of survey respondents in Dublin expect prices to rise over the next quarter, next year and the next three years.
The performance of the economy was considered to be a more important influence on house price expectations in Dublin.
Davy Stockbrokers economist Conall MacCoille said the results showed the relaxation of lending rules was spurring on price rises.
"This is surely evidence that the loosening of the Central Bank rules in late 2016 has added impetus to house price inflation, particularly in the capital."
Earlier this month, international credit ratings agency Standard & Poor's said it expected property prices here to outstrip the rest of Europe: "We expect Ireland's housing market to experience the strongest year-on-year nominal house prices rises of 8.5pc this year and 7pc in 2018, underpinned by supply shortages and continuing economic recovery."
The latest figures from the Central Statistics Office show property price growth accelerated in June. Prices were up 11.6pc on an annual basis.
In the year to June, the average market price paid by households for a dwelling was €258,544. In Dublin the average sales price was €401,890.