Belfast Telegraph

Saturday 20 September 2014

Irish finance chief stays calm as Dublin house prices surge again

Michael Noonan

The Irish Finance Minister Michael Noonan has said there is no need for concern about the hike in property prices in Dublin.

Mr Noonan said the increase in prices was ''quite small'' in proportion to the ''massive drop'' experienced in the sector.

Property prices in Dublin rose by 3.9% in September, taking the annual increase to 12.2%, according to the Irish Central Statistics Office (CSO).

Mr Noonan said the country was at the early stages of a restoration in the fortunes of the construction and building industry.

"The increase that there is in 2013 is quite small in proportion to the massive drop. There's no need for concern yet,'' he said.

"We need property prices to be restored. The trigger point is that they should at least reach on the second hand market the cost of building. It's an uneconomic situation if the cost of providing accommodation is higher than what you get on the market for second hand property.''

Eurogroup chair Jeroen Dijsselbloem said the Irish position was "quite good'' as it leaves the bailout, but said challenges remained in the banking and housing sectors. The Dutch Finance Minister ruled out the use of Europe's bailout pot, the European Stability Mechanism (ESM), in helping to deal with the cost to the banks of loss-making tracker mortgages.

"No, Ireland's moving out of the programme. You're proposing a new programme. No, I don't think it's necessary,'' he said.

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