Residential property prices have risen by 12.5% in the year to June, according to new figures from the Central Statistics Office.

Prices in Dublin were 23.9% higher last month than in June 2013, according to the data, while prices in the rest of the country rose 3.4% year-on-year.

On a monthly basis, prices rose by 2.9% nationally, compared to a 2.3% increase in May.

Dublin property prices were up 3.3% during the month, while in the rest of the country they were up 2.3%.

Despite the sharp annual increase, property prices remain well below peak levels according to the CSO.

Properties in Dublin are still priced 44.5% lower than in February 2007, according to the figures, with house prices 42.7% lower and apartment prices down 50.5%.

In the rest of Ireland, properties are priced 45.8% lower than at their peak in early 2007, putting the national average 43.4% lower than at its peak seven years ago.

Commenting on the CSO figures, Davy Economist Conall MacCoille noted that the lack of supply was driving up prices.

“Irish residential property market transactions look set to be broadly flat in 2014, at around 1.5% of housing stock, or a transaction once every 67 years”, Mr MacCoille added.

Property Industry Ireland Director Peter Stafford said of the latest figures: "Rising house prices may be good news for many homeowners, but the speed at which prices are growing is putting pressure on the private rental and social housing sectors."

Mr Stafford also said that students, in particular, are facing the consequence of increased prices in Irish cities.