House prices continue to rise with 13% hike in past year
Latest official figures indicate no let up in double-digit price growth
In its latest quarterly bulletin the Central Bank suggested that house prices would continue to rise, but played down concerns of another property-price bubble. Photograph: Tim Ireland/PA Wire
The property market is showing no signs of cooling, with prices advancing 13 per cent year-on-year in February. This compares to an annual increase of 12 per cent in January.
The latest official figures from the Central Statistics Office (CSO) appear to be at odds with recent reports from property websites MyHome.ie and Daft.ie, which both reported a slowdown in headline inflation.
The CSO figures show annual price growth in Dublin, where supply pressures are most evident, is now running at 12.7 per cent, the highest level in nearly three years.
They also indicate prices in Dublin have risen by over 90 per cent since the low point of the crash, and are 23 per cent off their 2007 peak value.
The highest house price growth in the capital was in Dublin City, at 14.2 per cent. In contrast, the lowest growth was in Dún Laoghaire-Rathdown, where house prices increased 9.6 per cent year-on-year.
Property prices in the Republic, excluding Dublin, were 13.3 per cent higher in the year to February.
The midlands region recorded the greatest level of price growth, with house prices increasing 14.8 per cent, while the southeast recorded the lowest level growth, with house prices increasing 8.6 per cent.
In its latest quarterly bulletin, published this week, the Central Bank suggested that house prices would continue to rise, but played down concerns of another property-price bubble.
“We are not seeing the same kind of house-price credit bubble that we saw a decade and more ago,” said Mark Cassidy, the Central Bank’s director of economics and statistics.
“At the moment credit conditions are still quite weak overall, and by this I mean while new mortgage lending is increasing quite rapidly this is from a very low base, and in fact the amount of outstanding credit in the economy is only increasing by the order of around 1 per cent a year,” he told RTÉ’s Morning Ireland.
Nonetheless, the director of financial services at Brokers Ireland, Rachel McGovern, said the latest figures were indicative of a severe housing deficit, which she said was “giving rise to a form of involuntary social engineering”.
“With rapid house-price inflation, particularly in Dublin, many seeking homes are being pushed further and further away from their places of work and in many cases families too, with long and expensive commutes.”
Commenting on the disparity between the CSO numbers and a recent report from MyHome.ie which pointed to a slowdown in price growth, Davy analyst Conall MacCoille said the slowdown was predicated on asking prices primarily in Dublin.
“Clearly transaction prices in Q1 2018 show that price inflation in Dublin is still firmly in double-digit territory. However, we wouldn’t expect the more sedate rises in asking prices in early 2018 to be felt in the transaction price data until the summer months.”