Economics: Irish residential property prices post annual rise of 12.2% in August

Other numbers from the CSO on Thursday showed that that in the year to August, residential property prices (houses and apartments combined) at a national level rose by 12.2%, up from the revised annual increase of 11.6% (12.3%) posted in July. Prices are only going one way in the short-term until the supply issue is resolved.

In Dublin, residential property prices increased by 11.9% in the year to August. Dublin house prices increased 11.7% whereas apartments rose 11.6% in the same period. The highest house price growth in August was once again in Dublin City, at 13.4%. In contrast, the lowest growth was once more in Fingal, with house prices rising 9.0%.

Residential property prices in the Rest of Ireland (i.e. excluding Dublin) were 12.6% higher in the year to August. House prices in the Rest of Ireland rose 12.3% over the period. The West region showed the greatest price growth, with house prices increasing 15.4%. Conversely, the Mid-West region showed the least price growth, with house prices rising 9.6%. Apartment prices in the Rest of Ireland increased 15.4% 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. One can argue until the cows come home as to the merits of the proposals announced, but at least the Government has taken a step in the right direction, with an acknowledgement that something dramatic needs to be done and sooner rather than later.

But as we wait for the measures to come through, 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 and well into 2018.

Alan McQuaid
Economist