Increase in property prices outside Dublin

Tuesday 01 April 2014 14.02
First quarterly rise in property prices outside Dublin since 2007
First quarterly rise in property prices outside Dublin since 2007

Property prices outside Dublin increased during the first three months of 2014, according to a report by property website Daft.ie.

It is the first quarterly rise since 2007.

The national average asking price is €170,000, an increase of 3.5% from same time last year.

Dublin property prices rose by 15% compared to the same period last year.

There are also increases in prices for Cork and Galway city centres of 2% to 3%.

But property prices in Waterford and Limerick city were down on the same period.

Meanwhile, new figures from MyHome.ie show asking prices in Dublin increased by 1.3% in the first quarter of 2014.

This is the fourth consecutive quarter that price increases have been recorded in Dublin, putting the adjusted average asking price in the capital at €244,000. 

Nationally, average asking prices continue to fall - down 0.7% in the first quarter, which is the lowest rate of decline in over six years. The average asking price nationwide is €188,000.

In Dublin, the annual percentage change is up almost 4% while the national figure is down almost 5%.

The Daft.ie report’s author said the increase in property prices outside Dublin is significant for those in negative equity.

Assistant Professor of Economics at Trinity College Dublin Ronan Lyons said the survey showed a rise in the average asking price of properties outside Dublin of 2% between January and March this year.

Speaking on RTÉ’s Morning Ireland, he said the average was still down, but it was the first time that prices outside the capital had risen quarter on quarter since mid-2007.

Commenting on the increase in house prices in Dublin, Mr Lyons said although this was a cause for concern, they were not anything close to 2006 - 2007 prices.

However, he said there were two things to worry about in relation to the 15% increase in prices in Dublin year on year.

Mr Lyons said a lack of supply of properties meant there was still lots of "unmet demand", and if people started expecting price increases of 10% to 15% year on year, then there was a danger of entering "bubble territory" again.

He said the Financial Regulator could put in place a minimum deposit required, to make sure that expectations do not get out of line.

The latest figures from Myhome.ie also show that there is significant volatility in asking prices nationwide and across property types also. 

"The volatility in asking prices is a feature of the transition phase that is currently under way in the market, which is being influenced by fluctuations in stock levels and the changing expectations of sellers", said Caroline Kelleher, author of the report from DKM Economic Consultants. 

Within the MyHome.ie report, a separate analysis based on new sale instructions to the market indicates that the median asking price has increased both in Dublin and nationally. 

The median asking price for new sale instructions in Dublin was up 10.2% in the year to Q1, while nationally it increased by 6%.

The national trend appears to be influenced significantly by Dublin, as an annual decline in the median asking price of 3.2% was recorded for new instructions outside Dublin. 

MyHome.ie Managing Director Angela Keegan said that although the Property Price Register was showing increased momentum in the market it was likely that national price trends are being influenced by urban markets such as Cork and Galway and counties in the Greater Dublin area. 

"The trends identified in new instructions and recent transactions are most welcome.

"However the road to recovery is a marathon not a sprint and the return to a properly functioning property market will only come about when we see a substantial increase in transactions, an increase in supply and low digit sustainable price growth," Ms Keegan said.