Property price inflation in Dublin and elsewhere is continuing to accelerate despite the Central Bank’s stringent new lending rules.
The latest Residential Property Price Index (RPPI) showed prices nationally rose by 1.6 per cent in August, giving rise to an annual rate of inflation of 7.2 per cent, the sharpest annual pace since June 2015.
In Dublin, where supply shortages are most acute, prices were up 1.5 per cent in August and by 4.5 per cent on an annual basis.
While the Central Bank’s macro-prudential rules, introduced in February 2015, tempered the market somewhat, demographic pressures combined with supply issues have kept prices on an upward curve.
The figures collated by the Central Statistics Office (CSO) show the highest annual house price growth was recorded in Dublin City and Fingal, with prices in both increasing by 5.9 per cent.
In contrast, the lowest growth was in Dún Laoghaire-Rathdown, with house prices rising just 1.5 per cent.
Residential sales
The CSO’s newly revamped property price index, launched last month, now covers all residential sales – including cash transactions, which represent up to 50 per cent of purchases.
The figures show residential property prices in the Republic excluding Dublin rose by 11.4 per cent in the year to August.
The South-West region showed the greatest price growth, with house prices increasing 14.8 per cent, while the Mid-East region recorded the lowest level of price growth, with house prices increasing 5 per cent.
The figures show property prices nationally are still on average 33.7 per cent below their 2007 peak at the height of the property boom here.
Additional information supplied by the CSO showed there were 3,277 residential property purchases filed with the Revenue Commissioners in August, a 2.5 per cent increase on the previous month.
The total value of household market purchases in August was €842.9 million. Of the total transactions recorded in August, 3,053 (93.2 per cent) were for existing dwellings while just 224 (6.8 per cent) were for new builds.
The CSO new index also provides average price data broken down by eircode. The average price of residential properties sold in Dublin 6 in the year to July was €694,402, making it the most expensive area in the country to buy, while in Dublin 10 the average price was €154,171. Outside of Dublin, the eircode with the highest average price (€404,717) was Greystones in Co Wicklow.
Price gains
Davy analyst Conall Mac Coille said the latest figures showed the price gains were the strongest in areas that had seen the slowest recovery so far.
In Dublin and its commuter belt counties of Kildare, Meath, Louth and Wicklow, he noted house prices were up 1.5 per cent on the month and 4 to 5 per cent on the year.
In the Midlands, while prices fell on the month by 0.5 per cent, they were still up 14.1 per cent on the year, said Mr Mac Coille, while in the southwest, prices rose by 1.2 per cent in August and 14.8 per cent annually.
Mr Mac Coille predicted the Government’s new tax rebate scheme for first-time buyers – worth 5 per cent, or a maximum €20,000 of the property’s value – would “add momentum” to house prices in 2017.
