Property market bottoming out before coronavirus crisis hit

Residential property prices rose by 1 per cent nationally in the 12 months to February, new figures show. This compares to a 1.1 per cent increase in the year to January and a 4.3 per cent rise in the 12 months to February 2019.

New data from the Central Statistics Office reveal residential prices fell by 0.1 per cent in Dublin in the year to February. House prices were unchanged while apartments rose by 0.8 per cent.

The highest house price growth in the capital was recorded in Fingal, up 3.4 per cent. The lowest was Dún Laoghaire-Rathdown, where prices declined 2.9 per cent.

Property prices outside Dublin were 2.4 per cent higher over the 12 months with houses up 2.5 per cent and apartments rising 0.5 per cent.

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Prices nationally have increased by 83.1 per cent from their trough in early 2013 but are still 17.9 per cent lower than their peak in 2007.

In Dublin, property prices are 22.1 per cent lower than their peak but up 93 per cent from their weakest point. Outside the capital, prices are 21.1 per cent lower than their 2007 high but have risen 81.5 per cent versus the trough.

Austin Hughes, chief economist with KBC, said the data confirmed that before the Covid-19 crisis, property price inflation had effectively bottomed out.

“The significance of pre-crisis data, such as the February house price numbers, lies in the inference that modest and broadly stable property price inflation suggests the Irish residential sales market entered the crisis in broad balance even if that ‘equilibrium’ meant the housing requirements of large numbers weren’t adequately met,” he said.

“In coming months, the effective shutdown of the Irish economy means housing market activity will be very limited and house price data will be based on very limited transactions. Hence, the information content of house price data could be somewhat compromised notwithstanding the best efforts of the Central Statistics Office,” Mr Hughes added.