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News : Property Last Updated: Feb 27, 2014 - 2:29 PM


Irish House Prices 2014: National annual rise at 6.3% in January; Dublin prices fell to 13.6% increase
By Finfacts Team
Feb 27, 2014 - 2:18 PM

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Irish House Prices 2014: In the year to January, residential property prices at a national level, increased by 6.3%, according to the CSO today. This compares with an increase of 6.4% in December and a decrease of 3.3% recorded in the twelve months to January 2013. In Dublin residential property prices fell by 1.3% in January and were 13.6% higher than a year ago. 

Residential property prices fell by 0.7% in the month of January. This compares with an increase of 0.3% recorded in December and a decrease of 0.6% recorded in January of last year.

 Dublin house prices fell by 1.5% in the month and were 13.2% higher compared to a year earlier. Dublin apartment prices were 16.7% higher when compared with the same month of 2013. However, it should be noted that the sub-indices for apartments are based on low volumes of observed transactions and consequently suffer from greater volatility than other series.

The price of residential properties in the Rest of Ireland (i.e. excluding Dublin) were unchanged in January compared with a decrease of 1.6% in January of last year. Prices were 1.2% higher than in January 2013.

Overall Decline: House prices in Dublin are 48.2% lower than at their highest level in early 2007. Apartments in Dublin are 54.6% lower than they were in February 2007. Residential property prices in Dublin are 49.7% lower than at their highest level in February 2007. The fall in the price of residential properties in the Rest of Ireland is somewhat lower at 46.8%. Overall, the national index is 46.7% lower than its highest level in 2007.

Juliet Tennent, economist at Goodbody, commented - - "Despite a monthly decline in prices in January, positive momentum in the property market continued with the national index rising by 6.3% yoy, close to the 6.4% yoy growth seen in December. That was the fastest annual rate of growth since mid-2007. On a monthly basis, residential prices fell 0.7%, the first monthly decline since March 2013. The weakness in the monthly data was driven by Dublin where overall prices fell 1.3% mom. However, this price data is based on mortgage data only which accounts for less than 50% of the market in volume terms and gives an incomplete picture and it is likely that the capital accounts for a larger proportion of cash transactions. We wouldn’t read too much into the January decline as a result.

Ex Dublin prices post first annual increase since 2008: On an annual basis, Dublin price appreciation slowed to 13.6% yoy, from 15.7% yoy in December, driven by both houses (13.2% yoy vs. 15.3% yoy) and apartments (16.7% yoy vs 20.8% yoy). Outside the capital there is evidence that the stabilisation continued with monthly price changes flat for the third consecutive month, resulting in an increase of 1.2% yoy. This represents the first annual increase in property prices outside Dublin since February 2008.

Transactions rise 7% yoy in January: Transaction data from the property price register shows that activity continues to gain momentum. Incomplete data indicates that transactions rose by 7% yoy in January. This follows a 14% yoy increase in transactions in Q4, which is particularly encouraging given that Q4 2012 benefitted from the expiation of MIR. On a rolling 12 month basis transaction are up 16% yoy. However, at 1.4% of total housing stock, activity remains very low. In addition, the IBF mortgage drawdown figures for Q4 2013 indicate that non mortgage transactions account for c.56% of the total transactions.

Expect property prices to remain underpinned in 2014: The continuing recovery in house prices belies a property market that remains constrained in terms of activity. Both negative equity and valuable tracker mortgages continue to constrain prospective sellers, (although we note Permanent TSB’s new portable tracker product which should help in this regard), while house completions are failing to keep pace with demand. These supply constraints will continue to underpin prices and we expect this to drive a rise in prices of 4% yoy nationally in 2014."

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