Ireland Home Price Growth Reflects New Lending Environment

Ireland Home Price Growth Reflects New Lending Environment

Residential News » Dublin Edition | By Michael Gerrity | April 6, 2015 9:27 AM ET

According to the latest House Price Report by Ireland-based, the average asking price for a house in Ireland grew by 4.6% in the first three months of 2015. This marks a return to price growth, following a 1% fall in the final three months of 2014.

The average asking price nationwide is now €201,000 ($221,000), the first time since mid-2011 that it has been above €200,000 ($219,000). This compares with a low of €170,000 ($187,000) in mid-2013 and a high of €378,000 ($417,000) in mid-2007.

For the first time in nearly four years, quarterly growth in prices in Dublin was slower than elsewhere in the country. Prices in Dublin are now 2.9% higher than in late 2014, whereas outside Dublin prices rose by 5.9% in the same three-month period.

This substantial quarterly increase in average prices was consistent across the country. In Cork, prices rose by 7.2%, while in Galway and Limerick they rose by 6.8% and 6.7% respectively. In Waterford, the increase was 4.9%, while outside the cities the average increase was 5.8%.

Commenting on the figures, author of the Report Ronan Lyons said, "It is clear that the Central Bank rules have had an impact on the market. Dublin prices are now anchored to real economic conditions, with survey respondents expecting significantly slower house price growth now than a year ago. Similarly, compared to a year ago, a far higher proportion of respondents, in the capital and elsewhere, indicated the need to save for a deposit as a key reason for delaying buying a home."

"Outside Dublin, the Central bank rules that link mortgages and incomes seem to have had, if anything, a positive impact on prices. The fact that house prices vary across the country by far more than incomes do means demand should reshuffle from Dublin to elsewhere in the country. While this may sound helpful, it does not address the underlying lack of supply in Dublin, which needs to be addressed as a matter of priority."

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