Residential property prices rise 7.1 per cent over past year

Irish residential property prices rose by 7.1 per cent in the year to April 2016, according to the Central Statistics Office (CSO).

Prices increased by 0.3 per cent in April, compared with no change in March and an increase of 0.6 per cent last April.

In Dublin, residential property prices increased by 1.6 per cent in April and were 4.6 per cent higher than a year ago.

Dublin house prices increased by 1.9 per cent in the month and were 5 per cent higher compared to a year earlier.

Dublin apartment prices were 1.1 per cent higher than in April 2015, though the CSO warns its apartment figures are based on low volumes of observed transactions and are more volatile.

Responding to the figures, Dr John McCartney, director of research at estate agents Savills Ireland, said: “This is exactly what we predicted. Price growth slowed in Dublin last year as tighter mortgage lending forced people into renting.

“However, this slowdown was always going to be temporary; the shift to renting has forced up rents, attracting investors who are now scrapping to buy properties and driving up prices.

“As this continues the Dublin market may become increasingly like London with expensive properties, many of which are owned by investors.”

He added: “With tighter mortgage lending introduced in February 2015, many people were priced out of the Dublin market and bought properties in Wicklow, Meath and Kildare. This drove strong price increases in those counties last year.

“But this has diminished their attractiveness, and increasingly, families are weighing up the cost savings against the longer commute and choosing to stay renting until they can assemble the deposit to buy in Dublin.”