House price growth jumps to three-year high of 8.6%

Dublin prices rise 8.1% over 12 months while prices outside capital increase 9%

The CSO says the number of property transactions in July rose by 10 per cent month on month to 3,822. Photograph: Sam Boal/ Photocall Ireland

The CSO says the number of property transactions in July rose by 10 per cent month on month to 3,822. Photograph: Sam Boal/ Photocall Ireland

 

Annual house price inflation jumped to 8.6 per cent in July, the fastest level of growth seen in the market in almost three years. This was up from 6.9 per cent the previous month.

The latest Central Statistics Office (CSO) figures show prices continue to trend upward on the back of pandemic-related factors such as increased savings.

Prices in Dublin rose by 8.1 per cent in the year to July, while prices outside the capital were 9.1 per cent higher.

While the property transactions came to a temporary halt during the first lockdown, sales have been buoyant since.

Ultra low interest rates, the demand for more spacious properties during the pandemic and pent-up savings are among the factors behind the increased buying activity.

The CSO said the number of property transactions rose by 10 per cent month on month in July to 3,822, with the total value of transactions put at €1.3 billion.

Buyers paid an average of €310,641 for a home in the 12 months to July. The mean price in Dublin (€479,454) was the highest in any region or county. Dún Laoghaire-Rathdown had the highest average price in the Dublin region at €649,916, while south Dublin had the lowest at €391,652.

Outside the capital

Outside Dublin, the mid-east was the most expensive region, with a mean price of €329,028. Wicklow was the most expensive county, with a mean price of €412,396.

The most expensive Eircode area for household dwelling purchases was Dublin 4 where the average price was €809,509.

“In the period before Covid-19, the annual growth in residential property prices fell gradually from 13.4 per cent in April 2018 to 0.9 per cent in March 2020,” CSO statistician Viacheslav Voronovich said.

“While price growth remained subdued throughout most of 2020, a trend of accelerating growth emerged in the latter part of the year and into 2021,” he said.

KBC Bank Ireland chief economist Austin Hughes said: “Affordability strains, panic buying and increased working from home may all be playing some role in wide variations in intensity of current price pressures.”

Joey Sheahan, head of credit with financial website MyMortgages, said the market was “a flurry of activity at the moment – as evidenced by the 3,822 transactions filed with Revenue in July alone”.

“First-time buyers make up a strong cohort of buyers as always, but we would expect that if the help-to-buy scheme is extended in the upcoming budget, as expected, their share of the market will continue to grow,” he said.

“The percentage of new dwellings transacted over the period has also increased which hopefully is a sign of greater construction output in a market where the delivery of new homes is absolutely crucial,” he said.