More indications have emerged that a two-tier property market is developing in the Republic, with the latest figures from the Central Statistics Office (CSO) showing property prices in Dublin increased in January but fell outside Dublin.
The cost of residential property in Dublin climbed 0.5 per cent in January and the average price of a home there was 2.1 per cent higher than in the same month last year.
However, prices elsewhere in the State have continued their downward spiral, the CSO figures show.
The average price of residential property in the Republic fell 3.3 per cent in the 12 months to the end of January, compared with an annualised rate of decline of 4.5 per cent the previous month.
The rate of decline has slowed significantly: prices in the 12 months to the end of January last year fell 17.4 per cent.
State-wide, property prices fell 0.6 per cent in January, compared with a decrease of 0.5 per cent recorded the previous month and a decline of 1.9 per cent recorded 12 months earlier.
In Dublin, residential property prices rose 0.5 per cent in January and were 2.1 per cent higher than a year ago. House prices in the capital climbed 0.3 per cent in January and were 2.8 per cent higher year-on-year. Compared with last year, apartment prices in Dublin have struggled and were 4.6 per cent off their January 2012 prices.
Outside Dublin, the price of residential property fell 1.6 per cent in January. In the same month last year, prices fell 0.7 per cent.
Dublin’s fall from peak
House prices in Dublin are now 54 per cent lower than at their highest level, which was recorded in early 2007.
Apartment prices in Dublin are 61 per cent lower than they were at their peak in February 2007.
The fall in the price of residential property outside Dublin is somewhat lower, according to the CSO: the overall decline is now put at 47 per cent.
The national property price index is 50 per cent lower than its highest level in 2007.
Sherry FitzGerald chief economist Marian Finnegan said there are not enough houses for sale to meet demand.
“The overall market has benefited from more than just a rush to buy. The CSO figures are closely matching ours, and should really be lagging them,” she said.
“But the trend we are seeing in the Dublin market and levels of price inflation, I would say, will remain positive in the first quarter of this year.”
Family homes
Davy stockbrokers agreed that a lack of supply of family homes was likely to be pushing up prices in Dublin but said the CSO index was not a reliable indicator of prices as it included only property transactions that involved mortgages.
“The reality is that cash buyers account for close to half of the current market, an unsustainable position, as mortgage lending remains at exceptionally low levels,” said David McNamara of Davy.
“The index remains an unreliable estimate of prices until such time as cash transactions are included,” he said.
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