Property prices in Ireland growing faster outside of Dublin, latest index shows

Property prices in Ireland increased 1.3% nationwide in September and are 8.9% higher year on year, the latest official figures shows.

But a breakdown of the data from the Central Statistics Office reveals that prices are now growing faster outside of Dublin than in the capital city which is no longer leading the nation.

In Dublin residential property prices rose by 0.9% in September and they are now 6.5% higher than in September 2014. This was the lowest annual increase since June 2013 and contrasts with the 20% rise recorded in April.

Dublin house prices rose by 1.1% in September while apartment prices decreased by 0.4%. Experts said that the decline is due to the introduction of lending restrictions by the Central Bank’s lending restrictions and the ending of the Capital Gains Tax (CGT) waiver for property purchases.

Outside of Dublin residential property prices rose by 1.6% in September and they are now up 11.4% compared with September 2014.

This means that across Ireland prices were 34.6% lower than their peak level in 2007 while in Dublin they were 35.6% lower. Excluding Dublin prices were 47.7% lower.

Peter Stafford of Property Industry Ireland, which represents property sector firms, pointed out that the last few months have been relatively stable for house prices, with fairly consistent low level growth.

He believes that the slowdown in house price growth in Dublin is largely driven by reduced borrowing capacity because of the new Central Bank mortgage rules and he also pointed out that sales are doing well. Between January and August 2015, there were 29,916 housing sales nationwide compared to 23,626 in the same period of 2014 and 16,462 in January to August 2013.

But he warned that there is a severe shortage of affordable homes to buy in many urban areas. ‘Population growth, demographic trends, as well as internal migration, will lead to increased transactions into the future. So it is vital that people looking to move house have a genuine choice of affordable accommodation,’ he added.

Stafford also explained that the Irish government missed an opportunity in the recent Budget to boost home building and address the shortage. While the government has pledged 20,000 new homes by 2020 it could do more to encourage private builders by reducing the cost of new housing through a fall in VAT and development levies, the organisation has said.

He added that while the delayed revaluation of housing for Local Property Tax to 2019 will help home owners over the short term, more needs to be done as part of a wider overhaul of property tax to create a sustainable, predictable and fair property tax system.