Property prices surge again

PROPERTY prices on the Northside are surging back to near Celtic Tiger levels according to two reports published last week.

House prices in Dublin North City are up by almost 11 per cent based on statistics from the MyHome.ie property report for the first three months of the year.

The Daft.ie house price report says North City prices are up 9.2 per cent, while in the City Centre the figure is an even more worrying 12.9 per cent.

The average asking price in the capital reached its lowest point in the second quarter of 2012 but Daft.ie figures show that since then prices have risen by an average of 54 per cent – or €119,000.

In the North City, the Daft.ie report shows average prices are now €309,887, while in the City Centre the figure is €282,451. Average prices in the West County are now €287,973, a year-on-year increase of seven per cent and in the North County they’ve increased by 10.1 per cent to €292,889.

The double digit increases in the city follow two years of relatively slow growth and experts believe they’re due to a combined effect of tweaks to Central Bank mortgage rules and the Government’s new help-to-buy scheme.

However, stock is still tight with just 2,700 properties for sale in Dublin in December, the lowest since the first half of 2014.

Ronan Lyons, economist at Trinity College Dublin and author of the Daft.ie report, says inflation was on the way down from a high of over 15 per cent two years ago but is on the rise again after falling to just 6.1 per cent early last year.

“That upward pressure is entirely down to Dublin,” he continued. “The inflation rate outside the capital is more or less the same now (9.9 per cent) as a year ago (9.8 per cent).

“In a number of parts of the city – including Dublin 1, Dublin 7 and Dublin 10 – prices are now up over 70 per cent from their lowest point. 

Across the city as a whole, prices increased by an average of €17,500 in the first three months of 2017 alone and have risen by almost €120,000 in the last five years.”

Lyons agrees that the problem now lies with supply rather than affordability, and if the problem isn’t addressed the country could face another property bubble with Dublin the worst affected city.

“It is unfortunate that the primary focus of policy efforts late last year, when it came to the housing market, was to further stimulate demand and prices rather than supply and quantities,” he said.

“Adding up the four components of demand – obsolescence, falling household size, natural increase and net migration – it is clear that the country needs at least 40,000 and in reality probably 50,000 homes per year.

“But in recent years, the number of new homes built has been at most one quarter of that.”

The MyHome data for early 2017 also points to a tightening housing market. The stock of homes listed for sale in Dublin was just 3,478, down 19 per cent on last year and the data suggests house price inflation in the capital will continue during the year.

“Having lagged the rest of the country last year, Dublin is back leading from the front again with renewed price growth,” said managing director of MyHome.ie, Angela Keegan.

“However, the lack of supply, particularly in the capital, remains acute and this will undoubtedly lead to intense competition between buyers.”