Irish house price growth picked up further in February and an already booming property market now looks set to heat up more than originally anticipated this year, according to a survey published today.
The house price index constructed by property website Daft.ie rose to 112.3 in February from 111.5 in January, suggesting that the asking price for houses in Ireland was 12.3 per cent above the 2005 average and up from a growth rate of 11.5 per cent recorded for January.
The index differs from most other property indices as it is based on asking prices rather than on actual closed sales.
"Figures from February indicate that asking prices for houses have risen a further 1.4 per cent compared to the December figures," Daft.ie said in its report, which followed a survey of 5,500 properties advertised on its website.
Austin Hughes, chief economist at IIB Bank, said the survey was a further sign that Ireland's already booming property market was growing at a much faster rate than many commentators had expected.
"The Daft House Price Index suggests that property price inflation is now running at a rate in the mid-teens," Mr Hughes wrote in an introduction to the index.
"This is somewhat faster than many other house price indicators but it is consistent with anecdotal evidence emerging from the market itself of late pointing to notable pick up in demand."
Last month's permanent tsb/ESRI House Price Index, which unlike Daft looks at sales rather than asking prices, showed prices grew at an annual rate of 10.2 per cent in January versus a 2005 average of 9.3 per cent.
In a Reuters poll of 11 economists late last month the median forecast for average house price growth this year rose to 7.5 per cent from 7 per cent in January but the latest round of indicators suggest further increases could be in the offing.
Central Bank data last week showed residential mortgage lending grew at a record annual pace of 28.8 per cent in January.
Ratings agency Fitch said that although there were worries over the sustainability of current growth levels, Ireland's housing market was for the moment still on a growth path.
"The combination of a continued low interest rate environment, a low tax regime, strong immigration and the large portion of the population in the family building stage is sustaining the demand needed to meet the high levels of construction," Fitch director Gregg Kohansky said.