Property prices up 7.4% in year to March

Irish property prices rose by 7.4 per cent in the year to March, figures published by the Central Statistics Office on Tuesday show, with growth still strongest outside the capital. However, a fall in prices outside of Dublin in the month of March suggest that the recovery may be softening somewhat.

Nationally, property prices rose by 7.4 per cent in the twelve months to March 2016, figures show, with the rate of growth slowing from an increase of 16.8 per cent in the same period to March 2015.

Prices rose by 0.3 per cent in the month of March, compared with no change in February, and an increase of 0.9 per cent recorded in March of last year.

When Dublin is excluded however, the index shows stronger price growth, with property prices outside the capital surging ahead by 10.5 per cent in the year to March. However, prices outside of Dublin actually fell by 0.2 per cent in the month of March, softening annual growth from 11.5 per cent in February. This is the first monthly decrease for prices outside the capital since January 2015.

Dublin

In the capital, prices rose by 3.9 per cent in the year to March, and by 0.9 per cent in the month, turning around four months of consecutive price decline. House prices advanced by 4.1 per cent in the year and by 1.2 per cent in the month. Price growth among apartments was less strong, increasing by 1.6 per cent in the year to March, but falling by 0.5 per cent in March.

Alan McQuaid, economist with Bloxham Stockbrokers, says that a lack of supply of houses is pushing up prices, while conversely, tighter mortgage lending restrictions imposed by the Central Bank is helping to contain house price growth.

Looking ahead, he expects house price growth to remain in positive territory on a year-on-year basis for a while.

“We are now looking for a more modest increase of 5 per cent in 2016, with the biggest gains coming outside Dublin,” he said.

Davy Stockbrokers is also forecasting annual price growth of 5 per cent for 2016.

Construction

However, given that the figures are based on mortgages drawn down, and hence do not include cash buyers who still account for about 50 per cent of sales, means that the figures are “almost meaningless” according to IPAV, the Institute of Professional Auctioneers & Valuers. IPAV is calling for Government finance to help boost supply and kickstart construction in the residential property market.