Report shows Ireland has just had six months of the biggest house price rises in last 12 years
House prices nationally have risen by more than €2,000 a month over the last 12 months, according to the latest House Price Report from daft.ie this morning.
It also shows that the national average list price during the second quarter of the year was €240,000 - that is more than 11% higher than the same time last year.
Trinity economist Ronan Lyons, the author of the report, says there are continued strong increases in house prices.
He said: "The increase between March and June this year was 4.3% and that's the same as we saw between December and March.
"Both of those increases are among the biggest we've seen in a three-month period over the last 10 or 12 years.
"So, put together we've seen very big increases in house prices over the six-month period, and that's not just in Dublin, it's also true in most parts of the country."
However, the sharp rises in property prices are not because of the Government’s Help-to-Buy scheme.
The scheme, which provides a tax refund to first-time buyers of newly-built homes, has been criticised by opposition parties and is now subject to a review by new Housing Minister Eoghan Murphy.
However Mr Lyons says he does not believe the scheme has had the impact some have claimed. “There have simply not been enough new homes sold in the first half of 2016 for this to explain such market-wide trends,” he said.
The report predicts that price increases “are likely to match or exceed those in 2014, when they rose by 14%”, having already risen by 8.5% in the first six months of the year.
It found that the national average list price between April and June was €240,000 —11.7% higher than a year previously and more than €75,000 higher than its lowest point.
In Dublin City the average price was €352,975, compared to €256,201 in Cork city; €268,535 in Galway city; €177,199 in Limerick City; and €158,861 in Waterford City.
The rate of increases in Dublin property prices has exceeded the rate for the rest of the country for the first time since early 2015 it found.
While Dublin prices were up 12.3% in the year to June, the rate in the rest of the country was 11.3%, despite higher rises in Galway (13.4%), Limerick (15.1%) and Waterford (14.5%) cities.
In Cork, the rate was 9.2% in the city, compared to 11.4% in the county.
While Mr Lyons disagrees with the suggestion that the Help-to-Buy scheme played a significant role in the rate of property price increases, he said he does believe the Central Bank’s decision to ease the deposit requirements for first-time buyers has played a role in price rises.
“After two years where Central Bank rules had capped house price growth in the capital, the relaxation of those rules has helped drive prices further up. The rules were changed in quite a specific way: all first-time buyers now face a 10% deposit, rather than the 20% faced by the rest of the market on anything over €220,000.
“This means that first-time buyers buying expensive homes have seen the biggest reduction in the deposit required,” Mr Lyons said.
“To give an example, someone buying a property in Dublin worth €250,000 has seen the required deposit fall by just over 10% (from €28,000 to €25,000). But someone buying a property worth €660,000 has seen their deposit requirement fall by 40% (from €110,000 to €66,000),” the report read.
“Therefore, we would expect the change in the Central Bank rules to have the largest effect on the most expensive markets in the country.
“And, by and large, this is what we have seen in the last six months,” Mr Lyons said.
