House prices see biggest gain since 2007 - CSO

Thursday 27 September 2012 06.25
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Planning permission for just 240 apartment units granted in the second half of 2012
Planning permission for just 240 apartment units granted in the second half of 2012
House prices index now 50% lower than its highest level in 2007
House prices index now 50% lower than its highest level in 2007

House prices nationwide rose for the second month in a row in August, new Central Statistics Office figures show.

House prices rose by 0.5% in August - the biggest gain since 2007. They had fallen by 1.6% the same month last year.

The CSO said that in the year to August, residential property prices fell by 11.8% at a national level.

The figures show that residential property prices in Dublin fell by 0.5% in August from July. They are 13.8% lower than the same time a year ago.

Dublin house prices fell by 0.7% last month and are 14.4% lower than August 2011.

Apartment prices in Dublin are 13.4% lower than the same time last year, the CSO noted.

The price of residential properties in the rest of Ireland - outside of Dublin - rose by 1.3% last month. This compares to a fall of 0.3% the same time last year.

Prices overall are 10.7% lower than in August 2011.

Dublin house prices are now 56% lower than their highest level in 2007, while houses nationwide are 46% off their peak.

Apartment prices in Dublin are 63% lower than their highest level in February 2007.

Overall, the national index is 50% lower than its highest level in 2007.

The CSO data is compiled using data on mortgage drawdowns provided on a monthly basis by eight of the main mortgage lending institutions based here.

It is transactions-based, meaning that prices are recorded only where a sale occurs.

Not all residential property deals are funded by a mortgage as some are cash-based and so are not included in this index.

Research in recent months from both the Central Bank and ESRI has concluded that the housing market may be close to a bottom, with signs of pent-up demand among under-35s seeking to buy a family home, especially in Dublin, according to Merrion Stockbrokers.

However, on a practical level they say it is difficult to see people rushing out to buy a house and to make such a big monetary outlay when labour market conditions remain very fragile.

The jobless rate is currently 14.8% and is unlikely to fall sharply any time soon, they point out.

''Although these latest figures are encouraging, we don't see a major improvement in the housing market until there is clear evidence that the jobless rate has peaked and is on a sustained downward trend,'' the company's economist Alan McQuaid said.

''Furthermore, the uncertainty of how a proposed property tax will be calculated is in our view also likely to weigh negatively on house sales/prices in the run-up to December's Budget,'' he added.

CSO figures show planning permissions drop 57.5%

The number of planning permissions granted in the second half of this year saw a 57.5% decrease on the same time last year.

New Central Statistics Office figures show that planning permissions were granted for 1,406 dwelling units in the three months from April to June, down 57.5% on the 3,310 units the same time last year.

The CSO figures show that planning permissions were given for a total of 1,166 houses in the three month period - down 55.1% on the 2,599 the same time the previous year.

Planning permissions were granted for 240 apartment units.

This compares to 711 units granted planning permission in the second quarter of 2011 - a fall of 66.2%.

One-off houses accounted for 59% of all new dwelling units granted planning permission in the three months from April to June.

The CSO figures show that total floor area planned was 824,000 square metres in the three months under examination.

Of this, 34.5% was for new dwellings, 41.4% for other new builds and 24.1% for extensions.

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