News

The price of an average semi-detached house in parts of Dublin is inflating as fast as in the boom years and the period immediately before the Central Bank introduced its lending restrictions two-and-a-half years ago.

Prices in North County and South County Dublin both increased by 5.6pc in the three months since December, while Dublin City, which includes postcoded locations, saw a price surge of 3.9pc – equating to 1.3pc per month or €5,200 per month on an average €400,000 city semi.

If inflation continues at this rate over 12 months, prices could increase by almost 22.5pc.

Shortage-driven house price inflation was nearing 20pc when the Central Bank introduced its lending restrictions to cool the market and prevent another bubble.

According to the Irish Independent/Real Estate Alliance Average House Price Survey, which concentrates on the sale prices of typical three-bed semi-detached houses, the average three-bed semi in Dublin city now costs €404,167, a rise of €15,000 (3.9pc) in the past three months and an increase of 12.8pc over the past year.

One agent is reporting that it takes just four weeks to sell the average property in the centre of Dublin, down from seven weeks at December 2016, as demand vastly outstrips supply for both starter homes and apartments.

The increases are being attributed to an increase in available finance amid a worsening shortage of second-hand stock and a rush in more affordable areas (particularly in North Dublin) among buyers to acquire a three-bedroom house before they are priced out under current stringent mortgage-lending conditions.

The easing of the Central Bank restriction on lending for first-time buyers has had an immediate effect on the market with a large rise in numbers at viewings and potential buyers with mortgage financing.

The house price survey concentrates on the actual sale price of Ireland’s typical stock home, the three-bed semi, rather than asking prices.

The average semi-detached house nationally now costs €209,944, the survey has found – a rise of 3.5pc on the figure of €202,926 in the fourth quarter of 2016.

Increase<

Overall, the average house price across the country has risen by 10.9pc over the past 12 months – a marked increase on the 7.7pc rise registered to the end of December 2016.

The biggest percentage increases over the past year came in the country’s smaller rural towns situated outside of Dublin, the commuter belt and the major cities.

Prices here rose by an average of 12.9pc over the year, with a three-bed semi now costing €136,194 – an increase of 3pc in the past three months.

The commuter counties of Louth, Meath, Kildare, Wicklow, Carlow and Laois rebounded after a relatively static end to 2016 to rise by 2.9pc in the past three months, with the average house appreciating by more than €6,000 in the quarter.

Ireland’s major cities outside the capital experienced a 2.3pc rise in the first quarter and 7.7pc on the year, with the average semi now costing €305,000 in Cork (+3.4pc), €132,000 in Galway (+2.1pc) and €178,000 in Limerick (+0.6pc).

“There has been a recovery in bank lending, which has been reflected in the purchasing end, but the accelerated figures in the Dublin market particularly show that we are moving into a vendors’ marketplace,” said REA spokesperson Healy Hynes. “Many private vendors are now emerging from negative equity and can afford to make the move from the starter to the second home.”

The only warnings of price decreases in the short term came in the holiday home areas of Donegal, such as Bundoran, where the Brexit effect has caused stagnation since the summer of 2016.
Article Source: http://tinyurl.com/kbwqb42