House prices in the Republic rose at an average annual rate of 7.5 per cent in July, down from 7.9 per cent the previous month, the latest official figures show.
The Central Statistics Office’s (CSO) Residential Property Price Index for July indicated prices in Dublin increased at an annual rate of 6 per cent while prices outside the capital were up by 8.7 per cent year-on-year.
Despite a marginal slowdown in headline price growth, the annualised rate of increase in property prices far exceeds the increase in wages over the same period, meaning the purchasing power of would-be buyers is continuing to be eroded.
Prices here are being fuelled by combination of supply shortages (amplified by a slowdown in new home completions) and Government incentives to buy.
RM Block
The Government’s housing targets aim for a total of 300,000 new homes to be built by 2030, starting with 41,000 homes this year and rising incrementally to 60,000 homes a year by 2030.
But most agencies are projecting this year’s output to fall well short of 41,000.
The latest CSO figures show the average price paid for a home nationally in the 12 months to July was €422,418, a steep multiple of average incomes.
The average price paid for a property in Dublin was €588,057.
The highest median or middle price (which is different from the average) for a dwelling was €675,000 in Dún Laoghaire-Rathdown, while the lowest median price was €195,000 in both Donegal and Leitrim.
The CSO figures indicated that the total value of transactions filed with Revenue in July was €2.1 billion. This was made up of 3,567 existing dwellings with a value of €1.5 billion, and 1,145 new dwellings with a value of €550.7 million.
Property prices nationally have increased by 169.4 per cent from their trough in early 2013 while prices in the capital are up by 164.4 per cent from their February 2012 low.
“While the slight fall in the rate of annual house price growth will be welcomed by aspiring buyers, this is not unusual for the summer, often a quiet time for house sales,” Trevor Grant, chairman of Irish Mortgage Advisors, said.
“However, this easing could be short-lived and we could well see the rate of house price growth pick up for September and October, often busy months for house sales,” he said.
Umbrella group Brokers Ireland said with disappointing housing statistics on permissions and commencements it was difficult to see any meaningful tapering of prices in the foreseeable future.
Deputy chief executive Rachel McGovern said: “There has been a marginal dip in the level of increases but nothing of any consequence.”
“Unfortunately that means our housing market will continue to best serve those on high incomes and those with access to financial support from family,” she said.
She said the Government now had a major task on its hands with its awaited new housing plan.
“It will take unparalleled measures to unlock the impediments, particularly in zoning, planning and infrastructure,” she said.
