Price rises set to continue outside Dublin until 2018
The average three-bed semi may have risen above €200,000 for the first time since the country emerged from the property crash, but this particular rising tide has simply not got enough boats to lift on a nationwide basis.
And while Dublin and the commuter areas are starting to recover from the stagnation caused by the Central Bank's mortgage deposit restrictions, the biggest percentage rises have in been in Ireland's smaller urban towns.
The REA Average House Price survey gives an up-to-date picture of the property market in towns and cities countrywide to the end of Q3.
Prices in Dublin city grew by 2.75pc to €373,333 from June to September while those in commuter counties and the main cities of Cork and Galway rose by an average of just under €3,000 to €217,176 (+1.21pc).
However, prices in the rest of the country increased by nearly €5,000 to €133,268 (+3.55pc). That's an annualised growth of 10.33pc - larger in areas such as Roscommon (+30pc to €85,000), Dundalk (+24pc to €155,000), Longford (+23.64pc to €68,000) and Kilkenny city (+22.58pc to €190,000) - giving a better return than any investment on the market.
However, houses are for living in, and these prices are being driven by a lack of suitable family homes, with supply 50pc off meeting demand. There has been a 9pc drop in sales across the country, with 8,900 units being sold between Jan-June 2016; In Limerick, that figure has fallen by 23pc due to lack of suitable supply. Limerick needs around 3,000 transactions per year to meet the present demand - at the moment we are looking at around 1,600. And there are still many areas where builders can't make a profit on building.
So where are the positives outside the major cities? There is a rise in enquiries, with time taken to sell down from seven weeks to five weeks in the year, and a definite increase in mortgage applications and approvals.
The Central Bank rules did not hit the market outside Dublin as hard. People have had time to save - with price increases bringing others closer to emerging from negative equity. More land is coming up for sale in larger urban areas, with more builders looking for fit-for-purpose sites, for example, builders looking for sites for student accommodation, which will then free up property in owner-occupier areas.
I expect that the market outside Dublin will appreciate by circa 10pc over the next year - because of lack of supply. I fear that it could be 2018 before we see the market return to a normal functioning market outside Dublin.
Michael O'Connor is chairman of REA