€40k jump in average house cost
THE average house price has gone up by more than €40,000 over the past year – and now stands at almost €284,000.
The most expensive average house price in the country is Dublin 4 at €776,000 while the cheapest is Ballyhaunis in Co. Mayo at €75,000.
One property expert said: ‘The supply issue still needs to be addressed. It is going to take time but it is coming on stream.’
THE average property price has gone up by more than €40,000 over the past year to almost €284,000, official figures show.
Although prices were up 13% over the past 12 months – its highest level for three years – the average house is still almost €76,000 below its peak price of €359,700 at the height of the bubble in 2007.
The most expensive place in the country is Dublin 4 district in the capital where the average price is €776,000 while the cheapest is Ballyhaunis in Co. Mayo where the average home can be snapped up for a little over €75,000.
Current price growth of 13% in the year to April is far higher than the 9.5% growth in the year to April 2017.
The Central Bank has said it will not look at its strict lending rules until later this year.
Currently, borrowers must raise a 20% deposit and can only borrow 3.5-times their annual income. Even with those in place, house prices are rising almost three times as fast as the average EU increase of 4.5% late last year, according the Eurostat.
Property Industry Ireland chief executive Dr David Duffy said there was no credit bubble and said prices are rising because too few new houses are coming to the market.
He said: ‘The supply issue still needs to be addressed. It is going to take time but it is coming on stream.
‘In the absence of a credit bubble, look at what’s driving those prices: we’ve got strong economic growth, growth in employment, we’ve got population increases, so there’s a lot of pressure on the demand side and supply is lagging.’
Brokers Ireland director Rachel McGovern said pentup demand for homes has built up over ‘several years’.
She said: ‘While those with deep pockets are winning in this high demand/low availability market, those on average incomes are seriously disadvantaged.’
Ms McGovern said the slowdown in house price growth in south Dublin was evidence that more house building had eased demand but affordability was also an issue.
Based on an estimate of 20,000 new homes being built last year and demand of 40,000 a year, house prices are likely to continue to rise, albeit perhaps not at the same unsustainable pace, she added.
KBC Bank chief economist Austin Hughes said the sharp price growth will fuel talk of ‘overheating’ but he said the problem was a supply one. ‘In terms of housing or lending, current levels of activity remain some distance below what might be considered normal. Serious logjams in supply coupled with pent-up demand mean the journey to sustainable outcomes could be problematic,’ he said.