House prices rose last month partially reversing the two previous months of decline, which experts had blamed on the introduction of new lending restrictions.
The latest official figures from the Central Statistics Office (CSO) for March show prices nationally rose by 0.9 per cent, and are now 16.8 per cent higher than a year ago.
In the capital, the increase was steeper with prices growing by 1.1 per cent in March, putting the annual inflation rate at 22.8 per cent.
The increase in prices are the first since the Central Bank’s new mortgage lending curbs, which were designed to take the heat out of the market.
A breakdown of the figures show Dublin house prices rose by 1 per cent in March whilst Dublin apartment prices increased by 2.1 per cent.
Outside of Dublin residential property prices rose by 0.7 per cent in March, with prices up 10.7 per cent year on year.
The CSO said property prices nationally were still 38.2 per cent lower than their peak level in 2007, however.
Dublin house prices were 36.9 per cent lower than their peak, while Dublin apartment prices were 42.2 per cent lower than their peak and Dublin residential property prices overall were 38.7 per cent lower than their highest level.
Outside of Dublin residential property prices were 41.5 per cent lower than their highest level in 2007.
Alan McQuaid from Merrion Stockbrokers noted the 16.8 per cent year-on-year rise was the largest annual increase since the height of the property boom, suggesting there is still life left in the current housing market rally.
“It does now look as though the monthly declines in house prices in the first two months of 2015 were weather related, with the lack of supply the key driver of prices,” he said.
“Although the tighter lending restrictions imposed by the Central Bank and the end of the Capital Gain Tax property purchase incentive scheme may weigh negatively to some degree, it appears that house price growth may be stronger in 2015 than we previously envisaged.”
Mr McQuaid said the improving improving economic backdrop should sustain the house price recovery in the short-term even with credit restrictions.
