Dublin property prices up by 25% in year

Dublin property prices have jumped by a quarter over the past year, according to data in in a new report.

Data from property website Myhome.ie and the Property Price Register has found that prices in the capital rose by 25 per cent over the year to the end of September.

The data indicated that the average transaction price nationally has increased by 16.5 per cent in the past year.

The report’s author, economist Caroline Kelleher of DKM Economic Consultants, said price rises in Dublin were being driven by a supply shortage and a “bidding war”.

Last week the Central Statistics Office said it believed house prices in Dublin had increased by 24.7 per cent and apartments by 32.6 per cent.

The report from The Irish Times owned website Myhome.ie also looked at prices sought by vendors over the past quarter. It found that the asking price for the average house in the capital grew by 9.6 per cent in the year to the end of September, and that the asking price nationally for the average house grew by 1.1 per cent, the first positive score since 2007.

Shortage

The difference between the growth in asking prices and the greater growth in transaction prices indicated there was a “bidding war”, said Ms Kelleher.

“There were only 500 completions in the capital in Q1 and, given that the Housing Agency has forecast a requirement of 5,700 units in Dublin alone this year, it is clear the rate of completions falls significantly short.”

Lending restrictions

Angela Keegan, managing director of Myhome.ie, said that while the findings were generally positive they underlined the need for Government to address the need for new housing.

The return to a normal functioning market will be a long one and will require action from a range of bodies, she said.

A report from Davy urges the Central Bank to limit loan-to-value ratios at 80 per cent, and prohibit mortgages that are greater than three to four times the borrowers’ combined incomes. It said house affordability here is roughly similar to that in the UK, where the Bank of England has indicated it will introduce measures to dampen credit flows.

The sluggish market is described in a comprehensive review of Ireland’s building stock. It found the national average housing turnover rate in the year to June 2014 was 1.4 per cent, well below what would be deemed to be a more normal 4 to 5 per cent. It was commissioned by GeoDirectory, a comprehensive address database established by An Post and Ordnance Survey Ireland.

Research by Aviva Home Insurance found that 36 per cent of Irish families feel they have outgrown their home.