Property prices have accelerated again with a jump of over 5 per cent recorded nationally for the 12 months to the end of January.
The latest residential property price index, compiled by the Central Statistics Office (CSO), showed prices rose by 5.4 per cent on an annual basis in January. This was the fifth month in a row that headline inflation in the property market has increased.
Prices in Dublin rose at an annual rate of 4.5 per cent while prices outside the capital rose by 6.1 per cent, the CSO said.
The housing market had slowed significantly last year on the back of 10 consecutive interest rate rises from the European Central Bank (ECB), which have made it more expensive for buyers to borrow. But prices have started rising again, with the pace of those increases accelerating.
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The latest pickup in prices comes amid expectations that the ECB will begin a cycle of rate reductions this year. Prices have also been buoyed by the various Government affordability schemes which have fuelled activity with first-time buyers.
The latest figures indicate that prices increased by 0.7 per cent month-on-month in January.
Buyers paid a median or middle price of €330,000 for a home in the 12 months to January, the latest figures show.
The Dublin region had the highest median price at €445,000. Within the Dublin region Dún Laoghaire-Rathdown had the highest median price of €620,000, while Fingal was the lowest in the capital at €410,250. The highest median prices outside of Dublin were in Wicklow (€437,500) and Kildare (€395,000), while the lowest was €165,000 in Leitrim.
The latest CSO figures indicated there were 3,621 home purchases by households at market prices filed with Revenue in January. This represents a 1.5 per cent decrease compared with January last year and a 28.5 per cent fall on the 5,063 purchases in December 2023. The total value of transactions filed in January was €1.4 billion.
Davy economist Dermot O’Leary noted that while annual house price inflation was still highest outside of Dublin, “momentum has been strong in the capital over recent months”.
“The annualised rate of growth in the three months to January was running at 15 per cent in Dublin, relative to 11 per cent outside Dublin,” he said, in contrast to the position over most of the previous 18 months.
Davy is forecasting a 4 per cent rise in prices this year though Mr O’Leary acknowledged “risks are now on the upside given the recent momentum and the prospect of rate cuts in the second half of the year”.
“The continued pickup in house price growth is further evidence that the Irish housing market has regained momentum and that the mismatch between housing supply and demand remains painfully evident,” said Ian Lawlor of Lotus Investment Group, which lends to developers. “Recent statistics marking a 15-year peak in the construction of new homes, with 32,695 units completed in 2023, ostensibly paint a picture of construction progress and achievement. Such statistical milestones, while noteworthy, should not serve as a smokescreen for the underlying challenges that persist in the housing sector.”
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