House price inflation accelerated again in July with values rising at an annual rate of almost 10 per cent.
The latest official figures show the average price paid nationally for a home in the 12 months to the end of July was €409,465. This was €31,563 more than the average price paid in the previous 12-month period.
The average price paid for a home in Dublin in the 12 months to July was €568,663 – €27,998 costlier than in the previous 12-month period.
The latest residential property price index, compiled by the Central Statistics Office (CSO), indicates that property prices nationally increased by 9.6 per cent in the year to July, up from a rate of 8.6 per cent previously.
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Prices in Dublin rose at an even steeper rate of 10.3 per cent year on year with values outside the capital increasing by 9.1 per cent.
July was the 11th consecutive month to see an increase in headline inflation in the State’s property market, a worrying trend for prospective buyers.
With supply pressures remaining and interest rates expected to start coming down, demand appears to be driving prices forward again. A fall in the supply of second-hand properties available for sale was also cited as a factor.
The CSO’s index reached a value of 183.9 in July, which is 12.4 per cent above the peak of the property boom in April 2007. Dublin residential property prices are estimated to be 0.6 per cent higher than their February 2007 peak, while prices in the rest of Ireland are estimated to be 13.3 per cent higher than their May 2007 peak.
There were 4,723 homes purchased by households at market prices in July, according to filings with the Revenue Commissioners, with a total value of €1.9 billion.
The CSO said this represents a 13.2 per cent increase on July 2023 and a 32.6 per cent jump on the June 2024 figure.
Households paid a median (or middle value) price of €340,000 for a home in the 12 months to July. The figure was highest in Dublin at €458,000 and, within the capital, Dún Laoghaire-Rathdown had the highest median price at €630,000, while Fingal had the lowest at €424,500.
Outside Dublin. the highest medians were recorded in Wicklow (€449,999) and Kildare (€395,000), while the lowest was €171,000 in Longford.
The European Central Bank (ECB) is expected to reduce interest rates further in the coming months after rate cuts in June and September as inflation across the euro zone continues to ease. That could add, further momentum to the market here.
The latest figures come as the Central Bank warned that there will be a “lowering of living standards” if the current housing shortfall was not addressed. In its latest quarterly bulletin, the regulator suggested the State would need to build 52,000 homes a year out to 2050 to address the current undersupply.
Brokers Ireland said the “debate over the number of homes needed has become tiresome”.
“We’ve had all the big institutions and think-tanks, along with the Government’s Housing Commission – the latest being the Central Bank – name big numbers, sometimes different big numbers. What we really need to hear is more about what is going to be done differently to ensure more homes are built so that prices stabilise and more affordable,” Rachel McGovern, deputy chief executive at Brokers Ireland said.
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