Property prices accelerated again in February with average values rising by over 6 per cent in annualised terms.
The latest residential property price index from the Central Statistics Office (CSO) indicated that prices rose at an average rate of 6.1 per cent in the 12 months to February, up from a rate of 5.4 per cent previously.
This was the sixth month in a row that headline inflation in the residential market here has increased. Prices in Dublin rose at an annual rate of 5.6 per cent in February, the CSO said, while prices outside the capital rose by 6.5 per cent.
The housing market had slowed last year as potential buyers grappled with increased borrowing costs on the back of 10 consecutive interest rate rises from the European Central Bank (ECB).
However, with supply pressures remaining and interest rates expected to start coming down later this year, demand appears to be driving prices forward again. Prices have also been lifted by the various Government affordability schemes which have fuelled activity within the first-time buyer segment of the market.
The latest figures indicate that prices increased by 0.3 per cent month-on-month in February, down from a 0.7 per cent increase the previous month.
According to the CSO, households paid a median or middle value price of €330,000 for a home on the residential property market in the 12 months to February.
The Dublin region had the highest median price (€445,000). Within the Dublin region, Dún Laoghaire-Rathdown had the highest median price (€620,000) while Fingal had the lowest (€410,000).
The highest median prices outside of Dublin were in Wicklow (€440,000) and Kildare (€395,000), while the lowest price was €165,000 in Leitrim.
A third terminal at Dublin Airport – urgent necessity or pie in the sky?
In terms of transactions, there were 3,327 dwelling purchases by households at market prices filed with Revenue in February worth €1.2 billion, the CSO said. This represented an 8.1 per cent decrease compared with the 3,621 purchases in January.
“Despite falling in February, residential transactions are holding up due to the growth in new housing supply and purchases by the non-household sector,” Goodbody’s chief economist Dermot O’Leary noted.
In the three months to February, transactions increased by 2 per cent year on year, with new home transactions up by 14 per cent and second-hand transactions down by 2 per cent, Mr O’Leary said.
Non-household purchases of new homes have been particularly strong recently, rising by 20 per cent year on year in the latest three-month period and accounting for 48 per cent of total new home transactions (42 per cent over the past 12 months), he said.
The CSO has not published a breakdown of these non-household purchases, but the public sector (approved housing bodies and the Land Development Agency (LDA)) are likely to form the majority of these purchases, Mr O’Leary said.
Trevor Grant, chairman of the Association of Irish Mortgage Advisers, said: “Continued house price growth is keeping many prospective first-time buyers worried about whether or not they’ll be able to enter the property market this year.”
“With housing supply remaining relatively limited and demand high, there’s little to dampen this growth,” he said.
Sign up for Business push alerts and have the best news, analysis and comment delivered directly to your phone
Property prices have accelerated again with a jump of over 5 per cent recorded nationally for the 12 months to the end of January.
The latest residential property price index, compiled by the Central Statistics Office (CSO), showed prices rose by 5.4 per cent on an annual basis in January. This was the fifth month in a row that headline inflation in the property market has increased.
Prices in Dublin rose at an annual rate of 4.5 per cent while prices outside the capital rose by 6.1 per cent, the CSO said.
The housing market had slowed significantly last year on the back of 10 consecutive interest rate rises from the European Central Bank (ECB), which have made it more expensive for buyers to borrow. But prices have started rising again, with the pace of those increases accelerating.
The latest pickup in prices comes amid expectations that the ECB will begin a cycle of rate reductions this year. Prices have also been buoyed by the various Government affordability schemes which have fuelled activity with first-time buyers.
The latest figures indicate that prices increased by 0.7 per cent month-on-month in January.
Buyers paid a median or middle price of €330,000 for a home in the 12 months to January, the latest figures show.
The Dublin region had the highest median price at €445,000. Within the Dublin region Dún Laoghaire-Rathdown had the highest median price of €620,000, while Fingal was the lowest in the capital at €410,250. The highest median prices outside of Dublin were in Wicklow (€437,500) and Kildare (€395,000), while the lowest was €165,000 in Leitrim.
The latest CSO figures indicated there were 3,621 home purchases by households at market prices filed with Revenue in January. This represents a 1.5 per cent decrease compared with January last year and a 28.5 per cent fall on the 5,063 purchases in December 2023. The total value of transactions filed in January was €1.4 billion.
Davy economist Dermot O’Leary noted that while annual house price inflation was still highest outside of Dublin, “momentum has been strong in the capital over recent months”.
“The annualised rate of growth in the three months to January was running at 15 per cent in Dublin, relative to 11 per cent outside Dublin,” he said, in contrast to the position over most of the previous 18 months.
Davy is forecasting a 4 per cent rise in prices this year though Mr O’Leary acknowledged “risks are now on the upside given the recent momentum and the prospect of rate cuts in the second half of the year”.
“The continued pickup in house price growth is further evidence that the Irish housing market has regained momentum and that the mismatch between housing supply and demand remains painfully evident,” said Ian Lawlor of Lotus Investment Group, which lends to developers. “Recent statistics marking a 15-year peak in the construction of new homes, with 32,695 units completed in 2023, ostensibly paint a picture of construction progress and achievement. Such statistical milestones, while noteworthy, should not serve as a smokescreen for the underlying challenges that persist in the housing sector.”
House prices across the State rose at an annual rate of 2.9 per cent in November, up from a rate of 2.2 per cent the previous month, as the market defied the dampening impact of higher borrowing costs.
The latest residential property price index, compiled by the Central Statistics Office (CSO), also showed that prices in Dublin, which had been declining, rose by 0.9 per cent year on year in November while prices outside Dublin were up by 4.4 per cent.
The State’s property market has slowed significantly since a pandemic-driven surge in 2020 and 2021 on the back of 10 consecutive interest rate rises from the European Central Bank, which have made it more expensive for buyers to borrow.
However, the Government’s help to buy schemes have fuelled activity particularly with first-time buyer segment of the market.
While headline inflation for the market as a whole is less than 3 per cent, the cost of new dwellings, which are predominantly bought by first-time purchasers, rose by over 10 per cent in the third quarter, the CSO said.
Buyers paid a median or middle price of €325,000 for a home in the 12 months to November, the latest figures show.
The Dublin region had the highest median price (€440,000) while within the Dublin region, Dún Laoghaire-Rathdown had the highest median price (€622,000), and South Dublin and Fingal both had the lowest (€410,000).
The highest median prices outside of Dublin were in Wicklow (€430,000) and Kildare (€390,000), while the lowest price was €161,000 in Longford.
The latest CSO figures indicate there were 4,255 house purchases were filed with Revenue in November, worth a total €1.8 billion.
This represents a 5.8 per cent decrease compared on the same month of 2022 but a marginal increase compared with October.
- Sign up for push alerts and have the best news, analysis and comment delivered directly to your phone
- Find The Irish Times on WhatsApp and stay up to date
- Our In The News podcast is now published daily – Find the latest episode here