Irish residential property prices rise 11.6% in year to June

Property prices are showing no signs of slowing down, with the latest figures indicating that price growth accelerated in June, with prices now growing at a rate of 11.6 per cent on an annual basis.

According to the Central Statistics Office (CSO), in the year to June residential property prices rose by 11.6 per cent, compared with an increase of 11.1 per cent in the year to May and an increase of 5.5 per cent in the 12 months to June 2016.

In the year to June, the average market price paid by households for a dwelling was €258,544, or €401,890 in Dublin. Over the year, Dún Laoghaire-Rathdown was the most expensive area to buy a house in Ireland, with an average price of €580,902. The least expensive county in which to buy a house was Co Longford, with an average price of €93,912.

In Dublin, the rate of growth was slightly lower, but at a still lofty 11.1 per cent, with house prices increasing at a slightly higher rate of 11.2 per cent, and apartments advancing by 10.6 per cent. The highest house price growth was in south Dublin, at 11.8 per cent. Across the city, house prices rose by just 5.4 per cent in Fingal.

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Outside of Dublin, property prices rose by 11.8 per cent in the year to June, with the southeast region showing the fastest growth rate of 16.7 per cent. Price growth was also significant in the midlands (14.8 per cent) and southwest (13.2 per cent). Price growth in the midwest region on the other hand was a more muted 8.4 per cent.

Conall MacCoille, economist with Davy Stockbrokers, attributes the gains to the robust economic recovery, looser credit conditions and the announcement of the “help-to-buy” scheme.

Recovery

The figures point to a continued recovery in property prices, with house prices nationally now just 29 per cent lower than the highest level reached in 2007, while Dublin prices are 29.9 per cent lower than their February 2007 peak, and property prices outside of Dublin are 34.6 per cent lower than their May 2007 peak.

The figures also point to a jump in transaction figures. In June, for example, 3,441 house purchases were filed with the Revenue Commissioners, up by 8.3 per cent increase compared with June 2016, but down by 0.4 per cent compared with May 2017, when 3,456 purchases were filed. The total value of the market, based on transactions filed in June, was €916 million.

The help-to-buy scheme, which offers first-time buyers 5 per cent of the purchase price of a new home, is clearly driving growth in the sales of new homes. Indeed the number of new homes being sold increased by 19.3 per cent in the year to June 2017, compared with an increase of just 6.4 per cent for the number of existing homes.

Revisions

The latest figures from the CSO incorporate a revision back to January 2010, to include additional categories of new dwellings, such as sites with associated building agreements; unitary contracts, which provide for a single bundled price for both the land and the construction; as well as residual transactions, which may be filed too late to be included in the original index calculations .

The revisions represent “a significant qualitative improvement” in the index, the CSO said. It means that property prices in June 2017 are 1.7 per cent higher than they would have been under the unrevised estimate.