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News : Irish Last Updated: Dec 19th, 2007 - 13:17:15


Irish house prices up 270% since 1996 rising at average of 14.9% for each of the last ten years; Construction sector may shed over 100,000 jobs by 2016
By Finfacts Team
Jun 20, 2006, 14:21

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-        National Prices rose 270% over past decade

-       Average annual price growth of almost 15% each year for ten years

-       Negligible price gap between country and Dublin prices a decade ago now stands at €130,000

-       County Wicklow records highest price growth (310%) while Roscommon fares lowest (195%).

-       Average size of property increases in houses outside Dublin (no change in Dublin houses) 

 

lSelected price growth rates from 1996 to 2005

 

More than 17 per cent of the private non-farm workforce are in construction. The total rises to 20 percent when jobs in services related to construction are added. The corresponding proportions for the UK and US are 7 per cent and 5.4 per cent respectively.

There are more than 250,000 directly employed in the Irish construction sector. When an estimated 80,000 in financial and business service jobs that are dependent on the construction sector are added to direct employment, we get a total of 330,000 - just short of 20% of the private workforce according to Central Statistics Office (CSO) figures. Business service jobs have increased by 100,00 in recent years.

Employment of 290,000 in Production Industries follows job losses of 30,000 in the past five years. Not alone are there more construction related jobs than industrial jobs in the economy, average annual earnings in construction are almost €40,000 compared with €30,200 in industry - a difference of 33 percent.

As the infrastructure and house building programme winds down, it is likely that more than 100,000 construction workers will be seeking employment elsewhere in the economy.

According to Bank of Ireland Private Banking, Irish investors have ploughed €30 billion (equity + borrowings) into commercial property in both Ireland and overseas in the past five years. Standard Life says that the Irish have invested £17 billion in UK property.

 

National House Prices in Ireland have risen by an average of 14.9% for each of the last ten years according to a special edition of the permanent tsb House Price Index published today.  Compiled in association with the ESRI, the index is widely regarded as the most authoritative measure of house price movements in Ireland.  Today’s special edition of the index was published to mark its 10th year measuring house price changes in Ireland. 

Headline figures from the special 10th Anniversary Index reveal the following:

 

  • National house prices have increased by 270% over the past ten years – compared to a total rise of just 30% in the consumer price index.
  • The average cost of a house in 1996 was just €75,000.  Ten years later (2005) the average cost had increased to €280,000.
  • On average national prices rose by an AVERAGE of 14.9% each year for those ten years.
  • In one year (1998) average national prices grew by a massive 30%.
  • Ten years ago the average difference between buying a house in Dublin or outside of Dublin was just €10,000.  Today that figures has grown to some €130,000.
  • A third of the current total number of houses in Ireland (547,000 houses – known as “the housing stock”) was built in the last ten years.
  • The value of all the houses in Ireland is estimated at some €412 billion – a four-fold increase on the figure ten years ago.
  • Rise in number of house completions each year from 33,700 (1996) to 81,000 (2005)

Speaking today, Niall O’Grady, Head of Marketing with permanent tsb said; “We have been through an extraordinary decade in the Irish housing market.  For many that decade has been challenging in the extreme – particularly for those trying to get on to the property ladder.  For others – including many ordinary home owners – it has brought significant opportunity and promise and for others it has been very lucrative.”

 

“Without doubt the dramatic price growth which has taken place over the past decade has had solid foundations; low interest rates, strongly supportive demographic trends and an outstanding employment fuelling economic performance.  In isolation any of these elements would have supported a strong housing market.  Together they created the circumstances which have led to the exceptional growth in prices we have become familiar with.”

 

 

lPrice gap between Dublin and Outside Dublin has widened to €130k in last 10 years

 

“Looking forward, these different elements remain in place in the Irish market and while the era of successive years of double digit price growth are unlikely to be repeated, we strongly concur with the view that we are entering the phase of the so-called soft landing where the gains in house prices which have already been made will be consolidated and were single digit price growth is likely for a number of years to come.” [note: for this year permanent tsb continue to expect a rise in national prices of approximately 10%].

 

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© Copyright 2007 by Finfacts.com

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