Property prices accelerated again in February with average values rising by more than 6 per cent in annualised terms.
The latest residential property price index from the Central Statistics Office (CSO) indicated that prices rose at an average rate of 6.1 per cent in the 12 months to February, up from a rate of 5.4 per cent previously.
This was the sixth month in a row that headline inflation in the residential market here has increased. Prices in Dublin rose at an annual rate of 5.6 per cent in February, the CSO said, while prices outside the capital rose by 6.5 per cent.
The housing market had slowed last year as potential buyers grappled with increased borrowing costs on the back of 10 consecutive interest rate rises from the European Central Bank.
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However, with supply pressures remaining and interest rates expected to start coming down later this year, demand appears to be driving prices forward again. Prices have also been lifted by the various Government affordability schemes which have fuelled activity within the first-time buyer segment of the market.
The latest figures indicate that prices increased by 0.3 per cent month on month in February, down from a 0.7 per cent increase the previous month.
According to the CSO, households paid a median or middle value price of €330,000 for a home on the residential property market in the 12 months to February.
The Dublin region had the highest median price (€445,000). Within the Dublin region, Dún Laoghaire-Rathdown had the highest median price (€620,000) while Fingal had the lowest (€410,000).
The highest median prices outside of Dublin were in Wicklow (€440,000) and Kildare (€395,000), while the lowest price was €165,000 in Leitrim.
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In terms of transactions, 3,327 dwelling purchases by households at market prices were filed with Revenue in February, worth €1.2 billion, the CSO said. This represented an 8.1 per cent decrease compared with the 3,621 purchases in January.
“Despite falling in February, residential transactions are holding up due to the growth in new housing supply and purchases by the non-household sector,” Goodbody’s chief economist Dermot O’Leary noted.
In the three months to February, transactions increased by 2 per cent year on year, with new home transactions up by 14 per cent and second-hand transactions down by 2 per cent, Mr O’Leary said.
Non-household purchases of new homes have been particularly strong recently, rising by 20 per cent year on year in the latest three-month period and accounting for 48 per cent of total new home transactions (42 per cent over the past 12 months), he said.
The CSO has not published a breakdown of these non-household purchases, but the public sector (approved housing bodies and the Land Development Agency) are likely to form the majority of these purchases, Mr O’Leary said.
Trevor Grant, chairman of the Association of Irish Mortgage Advisers, said: “Continued house price growth is keeping many prospective first-time buyers worried about whether or not they’ll be able to enter the property market this year.
“With housing supply remaining relatively limited and demand high, there’s little to dampen this growth.”
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