| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

Home 
 
 News
 Irish
 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 International
 Property
 Innovation
 
 Analysis/Comment
 
 Asia Economy

RSS FEED


How to use our RSS feed

Follow Finfacts on Twitter

 
Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.

Welcome

Finfacts is Ireland's leading business information site and you are in its business news section.

Links

Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News

Newspapers

Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News

 

Feedback

 

Content Management by interactivetools.com.

News : Property Last Updated: Sep 25, 2014 - 7:52 AM


Irish House Prices: National prices up 14.9% in year to August; Dublin prices surge 25.1%
By Michael Hennigan, Finfacts founder and editor
Sep 24, 2014 - 4:06 PM

Email this article
 Printer friendly page

Irish House Prices: In the year to August, residential property prices at a national level, increased by 14.9%.  This compares with an increase of 13.4% in July and an increase of 2.8% recorded in the twelve months to August 2013. Dublin prices surges by 25.1%.

The CSO said that residential property prices rose by 2.3% in the month of August.  This compares with an increase of 2.0% recorded in July and an increase of 0.9% recorded in August of last year.

In Dublin residential property prices grew by 3.5% in August and were 25.1% higher than a year ago.  Dublin house prices rose by 3.5% in the month and were 24.7% higher compared to a year earlier.  Dublin apartment prices were 32.6% 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) rose by 0.8% in August compared with an increase of 0.1% in August of last year.  Prices were 5.6% higher than in August 2013.

Overall Decline: House prices in Dublin are 39.2% lower than at their highest level in early 2007.  Apartments in Dublin are 45.8% lower than they were in February 2007.  Residential property prices in Dublin are 41.0% lower than at their highest level in February 2007.  The price of residential properties in the Rest of Ireland is 44.6% lower than their highest level in September 2007.  Overall, the national index is 41.0% lower than its highest level in 2007.

Irish mortgage approvals at 22,400 in year to July 2014; Lowest since 1974

Dublin prime office rents set to return to most expensive in Europe ranks

Property Industry Ireland, a unit of Ibec, the business lobby group, said that today's house price increases in Dublin are having an impact on driving up rents and putting pressure on social housing.

Responding to today's CSO figures, Peter Stafford, PII director, said: "While today’s continued house-price growth will help some people out of negative equity, this continued price growth, coupled with an increased number of transactions, will undoubtedly lead to further pressure on rents and increased demand for social housing, where there is already a huge shortage. The three sectors of the property market are inter-connected, and it is not surprising that we are seeing increased homelessness and shortages of local authority housing at the same time as price increases.

"By increasing supply of quality houses and apartments in areas of high demand such as Dublin where prices rose by 25% over the last year,we can relieve pressure on rents and ease demands for emergency social housing.

As I told the Oireachtas Environment Committee yesterday: 'Improving supply to the market will calm the market and will provide security to those who own houses and confidence to those who wish to own houses. It is the easiest way of controlling rents.

“Development of new houses, however, will not happen while the cost of construction and development is higher than the market price of the house. That is why, despite the growth in prices in some areas, there are still no cranes on the skyline. Two options are open to us: we can allow prices to rise or we can tackle the non-construction cost of development. VAT at 13.5%, the windfall tax on profits from rezoned land at 80%, and high local development charges all add to the cost of development and mean that in many parts of Ireland, commencing new buildings, despite any increased demand, is not yet viable.”

Conall Mac Coille, chief economist at Davy, commented - - "Today’s Irish residential property price data show house price inflation accelerating to fresh highs. House price inflation was 14.9% in August, split between 24.7% in Dublin and 5.8% outside the capital. Apartment prices are up by 24.0% on the year and by 32.6% in Dublin. On the month, residential property prices rose by a sharp 2.3%. For now, there appears to be little evidence that the recovery in Irish house prices is abating. Overall, residential property prices are now 41% below peak levels. House prices and apartment prices are 39.4% and 50% respectively below peak levels.

However, the Irish housing market remains exceptionally illiquid. In the first half of 2014, there were just 15,688 residential property market transactions, comprising around 0.8% of the housing stock. This suggests that the average house is being sold once every 64 years at current transaction rates. That said, year-to-date transaction levels are up almost 50% on 2013. However, the annual growth rate is flattered by particularly weak transactions in early 2013 following the expiry of mortgage interest reliefs at the end of 2012. Moreover, cash buyers continue to account for over 50% of transactions, hurting Irish banks’ ability to lend to first-time buyers, increasingly struggling to compete with investors attracted by rising rents, the lack of housing supply and capital gains tax exemptions.

The recovery in house price inflation has reflected positive developments such as confidence in Ireland’s long-term growth as economic prospects have improved. However, the pick-up in house price inflation increasingly reflects negative factors, preventing the Irish economy from achieving its potential. Specifically, activity and employment in housing construction remain at moribund levels, holding back the supply of fresh homes to satiate demand from first-time buyers.

Moreover, 90+ day mortgage arrears rates among delinquent buy-to-let investors continued to climb to 22.0% in Q2 2014. There are currently 15,000 buy-to-let borrowers in arrears for over 720 days with an average mortgage balance of €313,000 and arrears of €81,000. So far, repossessions of buy-to-let borrowers remain negligible. In time, however, banks will need to take action to repossess these delinquent borrowers, freeing up the pool of properties for first-time buyers. In doing so, banks will create greater confidence in their provisioning levels, helping the state to realise value from its remaining stakes in the banking sector."


© Copyright 2011 by Finfacts.com

Top of Page

Property
Latest Headlines
Irish residential rents rise 9% as students face tight market conditions
Irish construction activity growth eased in July
Irish residential property prices fell in Dublin in June
Irish mortgage approvals growth fell sharply in April 2015
Irish land prices among highest in world; Noonan tax cut boosts Dublin prices
AIB cuts Irish variable mortgage rates
Dublin residential property prices rose by 1.1% in March
Global property bubble: Dublin tops 2014 global returns at 44.7%
New Irish housing units in 2015 forecast at only 10,000
Ireland: Dublin house prices up 21% in year to February 2015 after price decline in month
Prime office rents in Dublin to rise by up to 31% in 2015 after 29% surge in 2014
Irish mortgages paid in 2014 at 1976 level; Half of house sales paid in cash
Irish residential property prices fell 1.4% nationwide in January
Irish House Rents: Supply tightens in Dublin's commuter counties in Q 42014
Irish commercial property returns in 2014 among highest in world
Irish Housing: "Unique" demographics to boost demand; Shortages to rise
Irish mortgage approvals in 2014 at 36-year low; Exceed paid loans
Irish commercial property investment in 2014 was 25% above bubble peak in 2006
Irish construction continues to rise from very low base
Irish house asking prices fell back slightly in fourth quarter of 2014
Price/Earnings multiple for Dublin houses is double 1993 level
Residential property rents up almost 10% in Dublin in past year
Irish Government and vested interests lobby for easing of Central Bank's mortgage rules
Ireland tops global property price rankings six years after bust
Number of Irish mortgages paid in 2014 at 1974/75 level - a 40 year-low
Irish construction PMI survey confidence measure highest since 2000
Irish mortgage arrears decline; 38,463 BTL accounts in arrears
Irish Housing: Renting provides less security than ownership, unpredictable rents
Ireland: NAMA to redeem €1bn of senior bonds; Fund Boland’s Mill site development
Ireland: 35,000 social housing units by 2020 achievable; Rental market possibly not
Dublin house prices up 24.1% in year to October 2014
Irish home ownership to fall due to affordability
'Tara Collection' of office buildings on sale in Dublin for €263.8m
Irish Housing Rents 2014: Dublin just 10% short of 2007 bubble peak
Irish Economy: Residential mortgage approvals in 2014 as low as in 1977
Irish Construction: Fastest rise in new business for decade - not level of activity
Biggest US individual landowner responds to tax breaks in Ireland and UK
Irish commercial property annual return to September 2014 at 36.6% - income at global high
NAMA expects surplus of less than €500m - it's not a profit; 88.5% sales to US investors
NAMA selling 588 Dublin apartments - name withheld in announcement