In a sign that the price surge in the property market is gaining momentum, asking prices in Dublin continue to increase this quarter while price growth has also extended to the national market. The mix adjusted average asking price in Dublin increased by 4.5% in Q2 2014, the largest increase since Q1 2006.
This is the fifth quarter in a row Dublin has recorded a price increase and puts the mix adjusted average asking price in the capital at €255,000, an increase of €11,000 on Q1.
The national mix adjusted average asking price grew by 1.3% for the same period - - the first such increase since the peak of the market in Q4 2006 – according to the latest house price survey from Myhome.ie.
The average mix-adjusted asking price nationally now stands at €190,000.
Dublin prices surged 22% in 12 months to May and jumped 4.2% in the month, the CSO reported last Wednesday and it said residential property prices at a national level, increased by 10.6%. This compares with an increase of 8.5% in April and a decrease of 1.1% recorded in the twelve months to May 2013.
The author of the Myhome.ie report Caroline Kelleher from DKM Economic Consultants said that while the recovery in national prices was encouraging, the stronger price growth in Dublin means the divergence between the capital and country is continuing to widen.
“Focusing on new sale instructions to the Dublin market, we see that the median asking price has increased 7.4% in Q2. This clearly reflects rising expectations among sellers in the current market.
In addition an analysis of transacted properties up to Q1 2014, for which matched data is available from Myhome.ie, shows that transaction prices in the year to Q1 2014 were up 20% in Dublin and 13.6% nationally which is in line with CSO trends.
“Supply constraints are clearly a key factor in Dublin and other key markets and these would appear to be driving the current price increases. Given the time lag in addressing supply issues it is likely prices will continue to rise in these areas for some time to come,” Kelleher said.
Angela Keegan managing director of Myhome.ie said the widening gap between the country and the capital as well as the volatile supply issue needed to be addressed.
“It’s heartening to see asking prices nationally rise for the first time in 8 years. While this is an important landmark on the road to recovery, we are still much closer to the start of that journey then the finish. The average mix-adjusted asking price in Dublin is now 34% higher than the national figure. This is on a par with trends seen at the height of the boom when the difference stood at 35%, albeit prices are at a much lower base.
“While the stock situation in the city did improve by 20% in Q2 this was due to seasonality more than anything else and given the projected low number of new builds it is clear affordability in Dublin is set to deteriorate further in 2014. Addressing supply issues where they exist will be key if we are to return to a normal functioning property market” Keegan concluded.
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