House prices in the Republic continued their upward climb in August, hitting double-digit growth as demand remained strong.
The latest official figures indicate that prices nationally rose at an annual rate of 10.1 per cent in the year to August, up from a rate of 9.6 per cent in July. It was the 12th consecutive month to see an increase in headline inflation, a worrying trend for prospective buyers.
On a monthly basis, prices were up by 0.9 per cent.
In Dublin, the level of price growth was even stronger at 10.8 per cent year on year.
The ongoing rise in prices appears to be down to a combination of factors including a shortage of supply, Government help-to-buy schemes and cheaper mortgage rates in anticipation of further interest rate reductions.
The figures from the latest residential property price index, compiled by the Central Statistics Office (CSO), suggest households paid a median or mid-point price of €345,000 for a home in the 12 months to August. The lowest median price paid for a dwelling was €175,000 in Longford, while the highest was €635,000 in Dún Laoghaire-Rathdown.
The CSO’s index has now reached the value of 185.6, which is 13.4 per cent above its highest level during the property boom in April 2007. Prices outside Dublin are 14 per cent higher than their May 2007 peak while homes in the capital are now 1.8 per cent higher than their February 2007 peak.
The CSO said 3,990 purchases by households at market prices were registered with Revenue in August, a 15.5 per cent fall on the previous month.
Brokers Ireland said there is still a magnitude of problems to be tackled in housing policy before one can be confident that demand and supply will come closer into alignment.
Deputy chief executive Rachel McGovern said: “We’re drowning in reports and political debate but it seems obvious that something different is needed to stimulate more supply. That is the only real answer to stabilising prices and making homes more affordable.”
She said a whole new Government approach was warranted. She cited a recent Housing Commission report which recommended the establishment of a time-limited housing delivery oversight executive in legislation as a decision-making body responsible for co-ordinating the delivery of housing.
“There are far too many bodies, authorities and institutions doing their own thing in a largely uncoordinated way. It badly needs to be pulled together and the Housing Commission recommendation seems to us to be the kind of disruptive change needed,” she said.
She said the proposed structure has much to recommend it, including taking housing delivery out of the heat of political debate.
Meanwhile there has been a surge in housing starts over the past month, according to Goodbody Stockbrokers, taking the total over the past year to about 61,000. There were 15,000 commencement notices published during September, according to the broker’s chief economist Dermot O’Leary.
“The spike coincides with deadlines around supply-side incentives introduced by the government. In this case, to avail of a rebate on water connections to residential sites, builders must have commenced activity by the end of September. They did so in large numbers, but uncertainty remains as to what proportion of these developments will be complete,” he wrote in a note to clients on Wednesday.
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