Belfast Telegraph

Republic's 'scalding' property price alert

By Charlie Weston

Property prices in the Republic are now rising so strongly there is a risk that first-time buyers will end up overstretched trying to meet mortgage repayments.

Economists said prices were not just overheating in urban areas – they were now so hot they were "scalding".

Prices in Dublin shot up almost 18% in the past year alone, although they fell in other parts of the country.

The Central Statistics Office (CSO) said prices across the country were up 8.5% in April, when compared with a year earlier. It was the 11th month in a row of prices rising on an annualised basis.

In April, prices across the south rose 1.4%, according to the CSO, while prices in Dublin rose by almost double that, at 3.1%.

Prices are now rising at the fastest pace since June 2007, around the time that prices peaked. When Dublin is excluded, there was a fall of 0.3% in prices in the month in what the CSO calls the "rest of Ireland". But over the past year, prices were up 1.3% in places outside the capital.

Despite the latest price surge, valuations are now 46% lower than they were at the peak of the boom in 2007, the CSO said.

Residential properties are now changing hands for €179,000 (£145,647) nationally, up €15,300 (£12,449) in the past year, according to calculations based on the figures by Goodbody Stockbrokers' Juliet Tennent.

In Dublin, prices have risen by €35,300 (£28,723) in a year to €233,000 (£189,585).

Outside the capital, the average property is transacting for €150,000 (£122,051), up close to €4,000 (£3,255) in a year.

Up to half of those with a residential mortgages are in negative equity.

Irish Finance Minister Michael Noonan has denied a bubble is developing, as he is anxious to see prices rising to take boom buyers out of negative equity.

Economist with Davy Stockbrokers, Conall MacCoille, said the housing market was starved of supply, which was pushing up prices at an unsustainable level, particularly in the capital. "Dublin's housing market is in the process of going from lukewarm to scalding hot," he said.

Belfast Telegraph

Popular

From Belfast Telegraph