The cost of homes climbed by 16.3 per cent nationally in the 12 months to the end of December, while Dublin house prices jumped by 23 per cent over the same period, the latest figures from the Central Statistics Office (CSO) have revealed.
Residential prices in the capital were up 0.3 per cent in December compared with the previous month, while prices across the State climbed 0.4 per cent last month.
While the price increases recorded in Dublin are dramatic, house prices are still 35.6 per cent lower than they were at their peak in early 2007, while apartment prices are 44.9 per cent lower than at their highest level in February 2007. The price of property outside of Dublin remains 41.4 per cent lower than at the peak in September 2007.
Alan McQuaid, chief economist with Merrion Capital, described the underlying housing market as stronger than the official data suggests as the CSO figures were based on mortgage draw-downs and do not include cash transactions.
“Although cash sales are not as high now compared with the start of 2014, they are still significant, accounting for roughly one in three of every transaction.”
He said the improving economic backdrop should help to sustain the house price recovery in the short-term even with credit restrictions.
"While house prices rose 16.3 per cent nationwide, across regions price trends vary considerably. This is down to local economic conditions and different supply and demand needs," said Peter Stafford of Property Industry Ireland, the Ibec group which represents the property sector.
" The real impact of the mortgage-lending policy announced by the Central Bank will need to be very carefully monitored in light of these trends. Initiatives to prevent a housing bubble should not be at the expense of regions which are only now starting to see new building taking place, or first-time buyers and tenants in cities who struggle to raise a deposit."
