Property prices rise by 12.5% over last 12 months

Consumer Affairs Correspondent

House price growth remains strong, with the latest official figures showing a 12.5 per cent average increase over the past 12 months. In some areas, prices rose by more than 17 per cent.

The fresh data from the Central Statistics Office (CSO), covering the year to the end of January, shows that prices increased at a far sharper rate than in the previous 12-month period when they climbed by 8.8 per cent.

Average prices were up 12.2 per cent in the 12 months to the end of November, the CSO found.

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From the trough in early 2013, average prices across the State have increased by 73.4 per cent, while Dublin prices have climbed by 89.2 per cent since February 2012 . Outside Dublin, the increase has been 65.7 per cent since the bottom of that market in May 2013.

Overall, the CSO’s price index remains 22.3 per cent below its 2007 peak. Dublin prices are 23.6 per cent lower than their market top in February of that year, while residential property prices in the rest of the State are 28 per cent lower than their peak, three months later, in May 2007.

Dublin The new figures show Dublin

prices are 12.1 per cent stronger over the past 12 months, with house prices climbing by 11.4 per cent and apartment prices accelerating by 15 per cent.

The strongest house price growth was in Fingal, where price rose by 14.2 per cent. Dún Laoghaire-Rathdown reported the most modest growth in the capital , with prices 9 per cent ahead over the year.

When Dublin was excluded, the rate of increase in the Republic was put at 13 per cent in the year to January.

The west led the way, with prices climbing by 17.2 per cent. The southeast region showed the least price growth – 9.9 per cent.

"Momentum in Irish property prices is extremely strong and, even if there were no further increases in the remaining months of the year, the average property price in 2018 would be 6.7 per cent above that in 2017," said Austin Hughes, the chief economist with KBC Bank Ireland.

“While a shortfall in supply is central to the upward pressure on prices, arguably the key driver of late is the pace of improvement in the Irish economy.”

Brokers Ireland said the double digit growth will leave “a whole generation of young people less well off in the second half of their lives”.

Rachel McGovern, director of the group, which represents 1,300 broker firms, said home ownership rates had dropped to 67.6 per cent in 2016 from a high of 80 per cent in 1991, while the total housing stock grew by just 8,800 between 2011 and 2016.

“While some may hold the ideological view that says we’re moving on as a nation by not being so wedded to home ownership, as financial planners we seriously challenge such thinking in an environment where people are paying rents that outstrip mortgage payments in most parts of the country, and considerably so in many instances,” she said.