Irish House Prices 2014: In the year to March, residential property
prices at a national level, increased by 7.8%. This compares with an increase
of 8.1% in February and a decrease of 3.0% recorded in the twelve months to
March 2013. Dublin prices are up by 14.3% in the 12 months.
The CSO said Wednesday that national residential property prices fell
by 0.7% in the month of March. This compares with an increase of 0.1% recorded
in February and a decrease of 0.5% recorded in March of last year.
In Dublin residential property prices remained unchanged in March and were
14.3% higher than a year ago. Dublin house prices rose by 0.3% in the month
and were 14.3% higher compared to a year earlier. Dublin apartment prices were
16.6% higher when compared with the same month of 2013. However,
the CSO said 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) fell by 1.6% in March compared with a decrease of 0.3% in March of last
year. Prices were 2.9% higher than in March 2013.
House prices in Dublin are 48.3% lower than
at their highest level in early 2007. Apartments in Dublin are 55.4% lower than
they were in February 2007. Residential property prices in Dublin are 50.0%
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 47.2%.
Overall, the national index is 47.0% lower than its highest level in 2007.
Conall Mac Coille, chief economist at Davy,
commented - - "Today’s residential property price data suggest that house prices
are falling back in Q1 2014. House prices fell 0.8% in March, up 7.6% on the
year. Overall, house prices declined by 0.5% in Q1 2014 following a 3.7% rise in
Q4 2013. So there appears to have been some slowdown in the rate of house price
One possibility is that the end of property tax exemptions towards end-2013
pushed up prices and transactions temporarily. Indeed, our analysis of the
Property Price Register shows that 10,600, or 36%, of transactions in 2013
occurred in the final quarter of the year. There were 6,304 transactions in Q1
2014, up 30% from the 4,852 in Q1 2013.
However, Q1 transactions represented just 1.3% of the housing stock. The bigger
picture is that housing market activity remains at exceptionally low levels,
indicative of the lack of new housing supply and construction activity. This is
bad news for Irish banks struggling to stabilise mortgage lending and competing
for new business."
Property Industry Ireland (PII), a unit of Ibec, welcomed the annual improvement in
house-prices, but warned that much of the growth, particularly in Dublin, points
to continued problems supplying properties into the market. The group said that
while annual price increases point to a recovery in the economy, they also
highlight that in some areas too many people are chasing too few properties.
Dr Peter Stafford, PII director, highlighted the need to radically improve the
data collected on property market trends and transactions: "Without quality data
it is very difficult to plan for the future and we risk repeating the mistakes
of the past.
“Data underpinning today’s CSO index comes only from properties purchased with a
mortgage, thereby excluding over 40% of all transactions every month. During a
period of very low numbers of transactions, excluding 40% of all market activity
makes it difficult for anyone, whether purchaser or vendor, to get a informed
understating of price trends in a particular locality.
“The purpose of producing a monthly index of property prices was to bring some
much-needed transparency to the residential property market. It is well
recognised that a pre-requisite to a functioning market is transparency.
Instead, because the CSO data is based on an incomplete analysis of the market,
and is not easily understandable, many people remain confused about what is
happening to prices around the country.”
Property Industry Ireland has called for a National Property Strategy to
underpin a return to stability in what continues to be an incredibly volatile
market. A key part of that strategy is the need to put in place a unified,
central repository of all market information collected by a dedicated State
agency and disseminated in a way which is clearly understandable.