Irish house prices rose at an annualised rate of 7.4 per cent in August, unchanged from the previous month, while the average price paid for a home was €423,000, the latest official figures show.
Price growth is being fuelled by combination of supply shortages, aggravated by a slowdown in new home completions, and State incentives to buy.
The Central Statistics Office’s (CSO) Residential Property Price Index for August indicated prices in Dublin increased at an annual rate of 5.3 per cent while prices outside the capital were up by 9.2 per cent year-on-year.
The Government’s housing targets aim for a total of 300,000 new homes to be built by 2030, starting with 41,000 homes this year and rising incrementally to 60,000 homes a year by 2030.
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But most agencies are projecting this year’s output to fall well short of 41,000.
The CSO’s figures indicated the mean price of a dwelling purchased in the 12 months to August was €423,561, a steep multiple of average incomes.
The average price paid in Dublin was €586,282.
The CSO’s national index for house prices has now reached the value of 199.4, which is 21.9 per cent above its highest level at the peak of the property boom in April 2007.
Dublin residential property prices are 7.2 per cent higher than their February 2007 peak, while residential property prices in the rest of Ireland are 24.5 per cent higher than their May 2007 peak.
“While the static rate of house price growth might be welcomed by aspiring buyers, house prices are still rising steeply and so remain unaffordable for many,” said Trevor Grant, chairperson of Irish Mortgage Advisors.
“Furthermore, in certain parts of Ireland, house price inflation is running well above average. This means that many locals are being priced out of their home towns and areas once considered affordable for commuters are no longer so,” he said.
Ipav, the Institute of Professional Auctioneers and Valuers, said too many of the current indicators on housing supply are in negative territory at the moment “and this does not augur well for supply, and consequently stabilisation in prices, in the foreseeable future”.
“This presents a seismic challenge for the Government with next month’s new housing plan,” Ipav’s Genevieve McGuirk said.
She said that plan will have to deliver “like nothing heretofore has.”
