House prices soaring outside Dublin, but slowing in capital

National average shows 8.5% increase in prices, but Dublin average is just 2.7%

The Daft report says there are just 25,000 houses for sale.  Photograph: Cyril Byrne

The Daft report says there are just 25,000 houses for sale. Photograph: Cyril Byrne

 

A new report confirms that Dublin has effectively de-coupled from the rest of Ireland in terms of house price growth, with asking prices slowly rising in the capital while they continue to soar in the rest of the country.

The latest Daft House Price Report shows that, nationally, asking prices rose by an average of 8.5 per cent in 2015.

Prices in Dublin rose by an average of just 2.7 per cent, however, while counties on counties on the southern and western seaboard and in some Border regions rose by up to 18 per cent.

The marked slowdown in price rises in Dublin versus the rest of the country is an about-turn on the situation for much of 2014, when prices in the capital streaked away from the rest of the country as demand outstripped supply.

Ronan Lyons, Daft’s chief economist, suggested the differing fortunes in house prices for Dublin and the rest of Ireland are partially explained by the impact of new lending caps.

The lending caps, which were announced last January by the Central Bank, mean that most mortgage holders must now stump up a 20 per cent deposit.

Effective

The national average asking price for a house in the last three months of 2015 was €204,000, compared with €188,000 at the end of 2014 and €164,000 at the market trough in early 2013.

While the lending caps dampened price growth in Dublin, its surrounding commuter counties continued to record strong increases. Asking prices were up 12.4 per cent in Kildare, 15.3 per cent in Meath and 9.2 per cent in Wicklow.

Asking price growth

Clare saw rises of 17.9 per cent while Cork and Waterford prices rose 17.3 per cent and 15.1 per cent respectively.

Offaly (up 4.2 per cent), Sligo (up 5.8 per cent) and Mayo (up 6 per cent) all failed to make the national average.

Within Dublin, prices in affluent south county Dublin were up less than 1 per cent, while north county Dublin saw rises of 3.1 per cent.

In the main cities outside the capital, the difference was marked compared with Dublin.

Prices rose by an average of 20.7 per cent in Cork city in 2015 and 19.7 per cent in Galway.

The Daft report says there are just 25,000 houses for sales, a drop of more than 50 per cent from the crisis-era trough.

Nationally, almost 60 per cent of houses sell in less than four months, as the stock of houses for sale sits at a nine-year low.

“Acute supply shortages persist,” Mr Lyons said.

“[But] while tough reforms still need to be made, at least there are encouraging signs that policymakers understand not only the nature of the problem, but also [the nature] of the solution.”