House prices rose by 8.5% during 2015 - reportMonday 04 January 2016 22.08
House prices rose by an average of 8.5% during 2015, according to the latest report from the property website Daft.ie.
The figures show a dramatic slowdown in Dublin house prices, while the shortage of housing supply is worsening.
The average asking price for a house in Ireland now stands at €204,000, up from €188,000 this time last year, and €164,000 at its lowest point in early 2013.
According to the report, there is a significant difference in prices between Dublin and the rest of the country.
In a reversal of 2014 trends, Dublin house prices rose by 2.7%, while prices outside Dublin increased by 13.1%.
Meanwhile, prices rose by an average of 20.7% in Cork in 2015 (compared to 14.7% in 2014), and by 19.7% in Galway (compared to 16.3% in 2014).
In Waterford city, inflation has increased significantly to 18.6%, from 4.1% a year ago, while the most dramatic change occurred in Limerick city.
A year ago, prices in Limerick city were still falling (by 1.3% year-on-year), but in the last twelve months they have risen by 22.3%.
Prices in the city are now back at mid-2012 levels. Elsewhere in the country, inflation has accelerated from 8.8% in 2014 to 12.1% in 2015.
Commenting on the figures, the report author Ronan Lyons said: “The dramatic slowdown in Dublin house prices in 2015 shows how effective the Central Bank rules have been.
“This has not been the case elsewhere in the country as house prices are lower relative to incomes and thus the new rules have not been as binding.
“Some have criticised the new rules as hindering new housing supply but the solution to a lack of supply is not stimulating demand even more. If supply is lacking, the solution to this must be found in reducing construction costs, not in giving borrowers access to potentially dangerous levels of mortgage credit,” he added.
According to Daft, around 25,000 properties are for sale nationwide (down from just under 30,000 a year ago), the lowest number in almost nine years.
The bulk of the reduction in available housing comes from outside the five main cities.
The report calls for the establishment of a land tax to ensure more supply of housing.