Property prices rise to 15 per cent higher than last year

Irish property prices rose nationally by 1.8 per cent last month and are now 15 per cent higher than a year ago.

The rise, indicated in the Residential Property Price Index published yesterday by the Central Statistic Office, is the first time prices have failed to rise by two per cent or more since April.

Year on year, monthly prices compared to 2013 have been rising steadily since March when they were 7.8 per cent higher than the same month last year. They were 15 per cent higher in September this year compared with September 2013.

Nationally, there was a 1.8 per cent increase in house prices in September, which brought prices to 14.6 per cent higher than September 2013. In terms of apartments, there was a 2.7 per cent increase, and a 25.1 per cent increase on September 2013.

A study carried out by Dr Kenneth Jordan of the Department of Transport has claimed Dublin house prices appear to be between 10-25 per cent above affordable prices, with price rises in the upper end of the market driving average price increases both in the capital and the rest of the country.

In Dublin, residential property prices grew by 2.5 per cent in September and were 23.4 per cent higher than a year before. This compares with a rise of 3.5 per cent in August and a rise of 2.7 per cent in July.

In terms of houses specifically, Dublin prices rose by 2.4 per cent in the month and were 22.6 per cent higher compared to a year earlier. Dublin apartment prices rose by 2.9 per cent and were 35.2 per cent higher when compared with the same month of 2013.

The price of residential properties outside Dublin has been rising since May, and rose again by 1.1 per cent in September, bringing prices to 7 per cent higher than September 2013, the largest year-on-year rise of any month.

Despite the increases, overall residential property prices all over the country are still significantly lower than the boom years of circa 2007. In Dublin they are 39.6 per cent lower than at their highest level in February 2007, while outside Dublin they are 44 per cent lower.

Dr Peter Stafford, the director of Property Industry Ireland, the body representing businesses in the construction and property sector, said the figures displayed the need for a “joined-up” policy response across all Government departments and the Central Bank.

“Property prices across Ireland have fragmented, we now have an urban property market which is performing in a completely different way to the market in rural areas,” he said.

“The Central Bank, the Department of Finance and the Department of Environment have all made announcements recently about how to tackle increasing prices and declining affordability. They need to work together to create a National Property Strategy to respond to this divergence, and put the market on an even keel.”