House price growth accelerates to 2.6% as market defies pandemic low

Latest figures, however, point to fall-off in transactions in January

The annual rate of growth in house prices recorded at the start of the year was the fastest in 20 months.

Property prices continue to defy predictions, rising by 2.6 per cent in the 12 months to January despite the disruption of the pandemic.

The annual rate of growth recorded at the start of the year was the fastest in 20 months.

Prices in Dublin, which had been declining, rose by 1.1 per cent year on year while prices outside Dublin rose by 4 per cent.

At the outset of the pandemic, many had predicted property values would decline sharply but a number of factors - increased savings, remote working, and ex-pats returning from London after Brexit - have driven them forward again.

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The latest Residential Property Price index suggested the number of property transactions in January, however, fell by 30 per cent to 3,691 compared with the previous month. The total value of transactions was €1.1 billion.

Price

The figures show households paid a median or middle-range price of €261,000 for a house over the 12-month period to the end of January. The Dublin region had the highest median price at €385,000.

Within Dublin, Dún Laoghaire-Rathdown had the highest median price (€537,842), while south Dublin had the lowest (€353,000). The highest median prices outside Dublin were in Wicklow (€350,000) and Kildare (€320,000), while the lowest price was €110,000 in Leitrim.

The Central Statistics Office (CSO) said existing dwellings accounted for 2,823 (81 per cent) of the dwellings purchased in January, a decrease of 3.4 per cent compared with January 2020. The balance of 661 (19 per cent) were new builds, a decrease of 13.9 per cent compared with the same month in 2020.

"Today's figures reflect the strong demand across Ireland's property market, particularly from first-time buyers," said Trevor Grant, chairperson of the Association of Irish Mortgage Advisors.

Climate

“ The slowdown in construction at the beginning of this year will compound the dearth of supply and intensify competition,” he said.

Undoubtedly, it’s difficult in the current climate, given the restrictions around viewings etc. However, as these restrictions lift over the coming weeks and months, we expect to see mortgage and property market ramp up in terms of activity. My advice to anyone looking to buy a home in the coming months, would be to get their affairs in order ASAP,” he said.

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times