Residential property prices in Ireland will rise by an average of up to 7 per cent nationally and up to 10 per cent in Dublin this year, according to an analysis of data on the housing market by Economic and Social Research Institute economist David Duffy.
Speaking at the launch of the Irish Banking Federation’s latest housing market monitor, he said, “I think there will be a rise in house prices in the order of 5-7 per cent nationally. Dublin will be 8-10 per cent.”
Mr Duffy said this reflected both a slow improvement in the economic outlook for Ireland and constrained supply in Dublin in the face of rising demand.
However, Mr Duffy said it was still “too soon” to say the property market had “turned completely” after the steep crash of the past five years.
“There are increasing signs of stability and some recovery but we need time to see if this is becoming embedded,” he said.
CSO figures
Mr Duffy's comments come just days after the Central Statistics Office said residential property prices nationally rose by 2.3 per cent in the year to July. The CSO said prices in Dublin grew by 3.3 per cent in July and were 8 per cent higher than a year earlier. This was based on the latest Residential Property Price Index.
The IBF’s housing monitor found there was a 3.3 per cent increase in properties listed for sale in the second quarter of this year – April to June – when compared with a year ago.
It also noted an 8 per cent increase to 5,642 in the number of housing market transactions and a 9.7 per cent rise to 4,408 in the level of mortgage approvals. The increase in mortgage drawdowns was just 0.7 per cent at 2,857.
In terms of properties listed for sale, 9,901 dwellings were put on the market in the second quarter. There was a 22 per cent increase in the number of properties listed in Dublin to 2,300 and 5 per cent rise for Leinster. Munster recorded a 2 per cent decline in the number of properties listed, while Connacht and Ulster fell by 7 per cent.
The housing monitor shows that the number of dwellings completed in the second quarter of this year was 2,009, marginally ahead of the 1,998 built in the same period of 2012.
Completions in both Dublin and “other cities” showed gains of 35 per cent. However, the number of dwellings commenced in Dublin during April and May fell to 107 this year from 256 in 2012.
Good or bad thing?
When asked if increases in house prices would be a good thing for the Irish economy, given the challenges facing the country and the fact that public servants had their pay cut recently under the Haddington Road agreement, Mr Duffy said: "In general, this is a good thing. These signs of recovery feed into consumer confidence . . . and feed into consumer spending."
The IBF’s housing monitor collates available data from various sources, which is collated for the federation by Identify Consulting.
