Economics: Latest Irish house price data forecast to have posted another double-digit annual increase in August

The domestic economic focus on Thursday turns to prices with the CSO releases later this morning of the consumer price index for September and residential property prices for August. Irish residential property prices (houses and apartments combined) at a national level rose by 3.0% in the month in July, the biggest monthly rise in three years. Year-on-year, prices were up 12.3%, the largest increase in two years, and up from the annual rise of 11.5% posted in June.

Prices are only going one way in the short-term until the supply issue is addressed. The Central Statistics Office is now shifting focus to median prices from mean prices in its publications and tools. It says that median price is a more appropriate tool of central tendency or what the typical buyer pays than mean price, as the latter is often skewed by exceptional high value properties.

In Dublin, residential property prices increased by 12.7% in the year to July. Dublin house prices increased 12.6% whereas apartments rose 12.0% in the same period. The highest house price growth in July was in Dublin City, at 13.6%. In contrast, the lowest growth was once more in Fingal, with house prices rising 7.4%. Residential property prices in the Rest of Ireland (i.e. excluding Dublin) were 11.7% higher in the year to July. House prices in the Rest of Ireland rose 11.8% over the period. The West region showed the greatest price growth, with house prices increasing 15.8%. Conversely, the Mid-West region showed the least price growth, with house prices rising 8.2%. Apartment prices in the Rest of Ireland increased 13.7% in the same period.

Housing has now overtaken Health as the main political “hot potato”, and the key focus in Tuesday’s Budget was on measures/initiatives that should help alleviate the problems going forward, but things won’t change overnight.

In the meantime, prices will continue to rise. We see house price growth staying in positive territory on a year-on-year basis for the foreseeable future, with the annual rate of increase now looking like it’s set to remain in double-digits for the remainder of 2017.

August is forecast to show an annual increase in residential property prices of 11.9%.

Alan McQuaid
Economist