Property prices still rising but at slower rate

PROPERTY prices are continuing to rise but the rate of increase is slowing, indicating a slight cooling off.

New figures from the Central Statistics Office (CSO) show prices were up 6.5pc nationally in the year to December.

This compares with a hike of 7.2pc in the year to November and a rise of 12.1pc in the 12 months to December 2017.

However, prices eased back 0.1pc in December. It was the second month in a row showing a slowdown.

Dublin prices rose 3.8pc in the year to December, as the easing off is particularly evident in the capital.

Central Bank mortgage lending rules are squeezing buyers out of the market in the capital, according to economists. Buyers are limited to borrowing three-and-a-half times their income.

Residential property prices in Ireland excluding Dublin were almost 10pc higher in the year to December.

The region outside Dublin that saw the largest rise in property prices was the MidWest at almost 19pc, while the smallest was recorded in the Border at 4.8pc.

Overall, the national index is 18pc lower than its highest level in 2007.

Dublin residential property prices are 21pc lower than their February 2007 peak.

The middle, or median, price paid for a property in December across the country was €260,000. This was up €10,000 on the price paid last November.

At the end of 2016 the median was €210,000, according to the CSO.

There were 44,500 property transactions last year. This compares with just 20,600 in 2012. Almost a third were bought by first-time owner occupiers. More than half were movers, with around one in five bought by investors.

The CSO said data it got from Revenue showed almost 1,400 first-time buyers bought in December, an increase of 10pc on the same month in 2017.

These purchases were composed of 445 new dwellings and 937 existing homes.

Dublin residential property prices are up 95pc from their February 2012 low and 80pc in the rest of the country.

Economist with Merrion Stockbrokers Alan McQuaid said a lack of supply remained the key issue. “First-time buyers continue to be priced out of the market. Subsidising purchasers through tax breaks is not the answer, but at least new supply is coming on stream,” he said.

Last year, a total of 18,072 new dwellings were completed, a 25pc increase on 2017.

This was forecast to rise to around 23,000 this year, Mr McQuaid said. However, this is still below the estimated figure of 35,000 a year needed to meet demand in the short-to medium-term.

He said the largest price rises were likely be outside the capital, with the asking price for houses in more expensive areas increasing more slowly.