Dublin house prices set to jump 15% this year, says Douglas Newman Good

Dublin house prices are set to jump by a further 15 per cent this year on the back of supply-side constraints and improved buyer sentiment, according to real estate agent Douglas Newman Good (DNG).

The group’s annual property review, published today, suggested second-hand house prices in the capital increased by 17.7 per cent last year with cash buyers accounting for the majority of sales.

DNG said cash buyers accounted for 54 per cent of sales in the first nine months of 2013.

However, this dropped to 40 per cent in September and October as an increased reliance on financial institutions to fund purchases started to appear.

The average price of a second-hand home in the greater Dublin area now stands at €302,846, according to DNG’s report.

Although house prices in the capital outpaced the rest of the country, growth was visible with a 21 per cent increase in transactions outside of Dublin versus 15 per cent in greater Dublin area between January and October of 2013.

Chief executive Keith Lowe said he expected a 15 per cent increase in house prices in the greater Dublin area in 2014, versus an average of 3-5 per cent in a number of other key urban areas.

"It is very encouraging to see 18 straight months of price increases for residential property in the capital. This has been largely driven by an improvement in consumer sentiment and confidence in the property market both from within Ireland and externally from non-Irish investors investing in the market," Mr Lowe said.

A breakdown of the figures for Dublin showed that the third quarter of 2013 experienced the biggest jump in prices at 5.6 per cent.

Houses in west Dublin had the biggest annual increase at 20.6 per cent followed by those in the south of the city at 17.5 per cent, with north Dublin showing an increase of 16.6 per cent.

Houses above the €500,000 mark increased most in value at 18.7 per cent narrowly beating houses in the €251,000 to €350,000 price range which increased at a rate of 18.6 per cent during the year.

Commenting in the report Dermot O’Leary, chief economist with Goodbody Stockbrokers, said: that the return of employment growth has been the most unambiguous sign that the economy is returning to health”, while from a housing market standpoint he added that “the return of full time jobs should make the uncertain buyer more likely to take the plunge”.