House prices rise in April

House prices across the State rose in April for the first time since last November, new data from the Central Statistics Office shows. The figures indicate that nationally, residential property prices were almost 1 per cent higher in April compared to a month earlier.

The new numbers point to a continued stabilisation in the market, a trend that has been in evidence since early 2012 (see chart).

Following a precipitous 50 per cent decline in prices in the five years to early 2012, prices have been broadly stable since.

Dublin prices
Although the apparent inflection point in the national market in the first half of last year was broad-based, property prices in Dublin have been somewhat more solid than those outside the capital.

In contrast to that trend, yesterday’s figures show non-Dublin prices rose by 1.2 per cent month on month in April, while those in the capital rose by a mere 0.2 per cent.

The month-on-month increase in April suggests that weakness in prices in the first three months of the year was a result of the ending of the Mortgage Interest Relief Scheme at the end of 2012.

The pending expiration of the scheme is thought to have provided a temporary boost to demand, and therefore prices, in the final months of last year as home buyers brought forward purchases.

However, the bringing forward of purchases is likely to have drained demand in the first months of the year, thereby causing the reversal of the increases of late 2012.

The sub-indices show that in April Dublin house prices remained unchanged on March but were at up 2.5 per cent from their post-crash low point reached last August.

Apartment prices
Dublin apartment prices increased by 1.8 per cent in April and were 6.2 per cent above their low point registered in July 2012. The CSO warned, however, that this sector suffered from considerable volatility given the low number of transactions.

Despite the small increases over the past year, house prices in Dublin remain 55 per cent below peak in early 2007. Apartments in Dublin are valued at 61 per cent less than they were in March 2007.

Outside Dublin, the decline since 2007 has been less steep but property prices have nevertheless fallen by 48 per cent, with apartments losing more of their value than houses.