Irish property market returns to pre-financial crisis level

IRISH property prices have bounced back to levels not witnessed since before the 2008 financial crisis as the market recovers from a pandemicinduced lull.

In the year to July, residential property prices jumped by 13pc to surpass levels last recorded in 2007, when a credit-fuelled boom triggered a property crash that decimated Ireland’s housing market.

Analysts have this time attributed price growth to a lack of supply rather than excessive credit, making housing a key political issue in the country.

While prices have continued to grow rapidly, the 13pc jump in July represents the slowest rate of growth in nearly a year. In the year to June, prices climbed by 14pc.

When the credit-fuelled property bubble burst in 2008, rafts of housing estates under construction in Ireland were left unfinished and unoccupied.

Despite the recovery in prices, the lack of supply has become a key political issue in Dublin with Sinn Féin capitalising on the government’s failures in this area and making it the most popular party in the country, according to the latest opinion polls.

Property prices grew most rapidly outside of Dublin at 15pc, while residential property prices in the capital were 10pc higher than a year earlier, according to the central statistics office.

Conall Mac Coille, chief economist at broker Davy, said: “Irish housing market activity is clearly still recovering from the disruption of Covid-19, for now resilient to economic uncertainty and the prospect of further European Central Bank rate hikes due to pent-up demand and the healthy labour market.”