House prices defy predictions to rise 2.2% in 2020

House prices rose by an average of 2.2 per cent last year, despite the pandemic.

The annual rate of growth recorded in December was the fastest in 17 months.

Prices in Dublin, which had been declining, also ended the year higher – up 1.2 per cent in the year to December.

At the outset of the pandemic, with unemployment spiralling, many had predicted 2020 would see a major fall in house prices. However, the market has defied expectations.

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The December figure was the strongest rate of growth nationally since July 2019.

The latest Residential Property Price Index also pointed to a significant pick-up in transactions. In December, 4,988 house purchases were filed with Revenue, which represented a 13.6 per cent increase on the 4,391 purchases recorded in December 2019.

The transactions total for December was also 17.8 per cent higher than the previous month.

The Central Statistics Office (CSO) said the total value of transactions filed in December was €1.6 billion.

The figures show households paid a median or middle-range price of €260,000 for a house over the 12-month period to the end of December. The Dublin region had the highest median price at €380,000.

Within Dublin, Dún Laoghaire-Rathdown had the highest median price (€532,000), while south Dublin had the lowest (€352,000).

Leitrim lowest

The highest median prices outside Dublin were in Wicklow (€349,000) and Kildare (€320,000), while the lowest price was €110,000 in Leitrim.

The CSO said existing dwellings accounted for 3,907 (78.3 per cent) of the dwellings purchased in December, an increase of 15.4 per cent compared with December 2019. The balance of 1,081 (21.7 per cent) were new builds, an increase of 7.5 per cent compared with the same month in 2019.

The latest register suggests prices of new dwellings have risen 72.6 per cent from their post-crash trough in the middle of 2013, while prices of existing homes are now 84.8 per cent higher than at their trough in 2012.

Brokers Ireland said the surge in prices in December was indicative of strong underlying demand that had been “unleashed” following the realisation that prices would not drop as a result of the pandemic, according to Brokers Ireland.

“This mirrors Central Bank data this week which showed a 15 per cent increase in new mortgages year on year in December,” said Rachel McGovern, the group’s director of financial services.

“What is notable in the data also is that 52.9 per cent of purchasers are former owner-occupiers. This probably reflects the fact that many have now come out of negative equity and are making a move they had wanted to make for some time but were unable to do so,” she added.