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
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
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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