Solid price growth continues in Ireland, up over 7% year on year

Property prices in Ireland increased by 7.1% in the 12 months to October 2016, down slightly from the 7.6% recorded in the previous month, the latest index figures show.

In Dublin property prices increased by 5.5% year on year with house prices alone up 6.1% and apartments up 4.1% while the highest house price growth was in Dublin City at 7.5% and the lowest growth in Fingal at 3.4%.

In the rest of Ireland prices were 10.2% higher in the year to October with the biggest growth recorded in the Midland region at 16.6% while the Mid-East region showed the least price growth of 6.1%.

The data from the Central Statistics Office also shows that overall, the national index is 32.4% lower than its highest level in 2007. Dublin residential property prices are 32.7% lower than their February 2007 peak, while residential property prices in the Rest of Ireland are 37.1% lower than their May 2007 peak.

It means that from the trough in early 2013, prices nationally have increased by 48.4%. In the same period, Dublin residential property prices have increased 64.7% whilst residential property prices in the rest of Ireland are 44.7% higher.

In October, the average market price paid by buyers was €250,147. However, it should be noted that this is a simple average which can vary considerably from month to month as the mix of properties sold changes.

The average price over 12 months is a more stable measure of average price and in the 12 months to August, the most up to date figures available, the average market price paid was €235,750.

In the year to October, the average price paid for a dwelling by households was higher in Dublin than in other region or county at €386,657. Of the four administrative areas of Dublin, Dún Laoghaire-Rathdown was the most expensive with an average price of €544,111 and South Dublin was the least expensive with an average price of €307,650.

After Dublin, the next most expensive region was the Mid-East with an average price of €238,492. Within the Mid-East, County Wicklow was most expensive with an average price of €314,690.

The least expensive region over the last 12 months was the Border region with an average price of €112,586 and the least expensive was County Longford in the Midland region with an average price of €83,420.

A new report from the European Commission says that property prices are still undervalued in Ireland and there is scope for them to increase further in 2017. It states that they were undervalued by 15% in 2015.

Austin Hughes, and economist with KBC Bank agrees that there is still room for price growth. ‘If the current pace of price increase is sustained to the end of this year, this would correct about half of the undervaluation estimated in the commission report,’ he said.

‘In turn, this would suggest that, in the absence of notably adverse shocks to the Irish economy in 2017, Irish house prices could see further solid gains,’ he added.