House price growth in the capital has 'rebounded'
Central Bank: easing lending rules is not a solution to the shortage of homes
Dublin house price growth has "rebounded" in the first four months of the year, the director of research at Savills has said.
John McCartney said house price inflation in the capital had almost doubled since the beginning of 2016, rising steadily from 2.6pc to 4.6pc.
It comes as the Central Bank once again highlighted that the evidence would need to be significant if its tough mortgage rules were to be altered. And it suggested that a solution for the housing shortage should not be sought through an easing of the rules.
Speaking at a conference, Mr McCartney said the mortgage rules from the Central Bank had been more of a "bump" than a "lasting barrier to house price growth".
"If you freeze people out of buying their own homes, they have to rent. This just inflates rents and attracts investors who drive up prices by competing for properties," Mr McCartney said.
He added that house price growth is expected to accelerate to 5.5pc by the middle of the year due in part to continued investor activity. "House prices in Dublin actually fell in May and June last year," he said. "So even modest growth this summer will lead to a sharp increase in the annual inflation rate.
"Strong price increases outside Dublin last year have made it harder and harder to sustain the same growth rate.
"In addition, regional markets are suffering from the fact that prices in those locations caught up somewhat with the larger urban markets in 2015."
It comes as the Central Bank has said it accepts that its tough mortgage deposit rules have impacted on the ability of people to buy a property, but stressed the measures are designed to protect the system and limit the risk of another credit boom.
And deputy governor Sharon Donnery insisted again that the evidence needed to change the rules would be "significant" as she set out details of a public call for evidence into their impact.
"We acknowledge that our measures impact individuals' ability to access credit and purchase homes," Ms Donnery said.
"However, these loan-to-value and loan-to-income ratio limits are designed to protect the system as a whole and limit the risk of a house-price-credit cycle emerging once again. And in this context we must take a medium- to long-term view."
Ms Donnery said the measures, enacted in February of last year, were introduced as a permanent and structural feature of the Irish mortgage market.
"The evidence threshold to justify adjustments to these rules is significant," she said.
"While the housing shortage is widely acknowledged, housing shortfall issues must primarily be address by other targeted policies."
The call for evidence will remain open from today until August 10.
Property prices nationwide rose again in April, the latest month for which data is available, as a shortage of homes to buy continued to push up values, according to the Central Statistics Office.
Dublin led the charge upwards, but there was a fall in prices outside the capital.
Prices across the State were up 0.3pc in the month of April, and have now risen by 7.1pc in the previous 12 months.
The CSO said that Dublin prices were up 1.6pc in April. When compared with a year ago, prices were 4.6pc higher.
However, there was a decline outside Dublin. Residential property prices in the rest of Ireland fell by 0.6pc in April.