Property prices in capital climb €5,000 a month
PROPERTY prices are rising by €5,000 a month in Dublin as the capital struggles with a chronic shortage of supply.
The average resale value of a house in the capital is now €329,700. This reflects a jump of 23pc over the last year in the prices properties are changing hands for, according to the Douglas Newman Good (DNG) house price guide.
This is a far stronger price appreciation than that picked up on by the Central Statistics Office. The CSO said last week that Dublin was 13.3pc higher in February, when compared with the same month last year.
However, the CSO figures only take account of prices transacted where there is a mortgage drawn down. Around half of property sales are for cash.
DNG chief executive Keith Lowe said his agency's figures indicated that average prices in Dublin rose by 9pc during the first three months of this year, the seventh consecutive quarterly rise.
With the average resale price of a Dublin house now standing at €329,719 – reflecting an annual increase of €62,000 – this works out at an increase of €5,000 each month.
And a separate report from Sherry FitzGerald also found strong evidence of price inflation in Cork and Galway cities. Cork city prices jumped by 5.5pc in the first three months of the year, with Galway city prices up 3.1pc in the same period.
Both cities are suffering from a shortage of properties for sale.
When Dublin is excluded from the Sherry FitzGerald figures, there was a quarterly rise of 3pc in values.
Both DNG and Sherry FitzGerald found that a lack of supply in the property market is driving up prices.
This is reflected in the fact that 400,000 homes are now rented compared with 200,000 in 2006, DNG noted. DNG said rising rents and the creation of 20,000 new households annually have all contributed to the increasing house inflation.
Although residential property prices remain 50pc below their peak, it said there had been a 36pc increase on average since the market low point in early 2012.
Mr Lowe said: "Property prices in the capital were always likely to rebound quickly as they fell too fast and too far.
"What is happening at the moment is a realignment of house prices in the capital. This is good news for anybody who purchased a house in the greater Dublin area in the last 18 months and those in negative equity."