Property prices up 6.9 per cent annually in May 2016

The latest monthly statistical release shows prices went up 0.2 per cent compared to April 2016.

This compares with a monthly increase of 0.3 per cent in April and an increase of 0.5 per cent recorded in May of last year.

Residential property prices in Dublin increased by 0.1 per cent in May and were 4.8 per cent higher than a year ago.

Dublin house prices increased by 0.4 per cent in May, 5.7 per cent higher compared to May 2015, while Dublin apartment prices were 1.1 per cent lower whne compared to May 2015.

However, the CSO warned that the sub-indices for apartments are based on low volumes of observed transactions and consequently suffer from greater volatility than other series.

The price of residential properties in the rest of Ireland increased by 0.1 per cent in May compared with an increase of 1.1 per cent in May of last year. Prices were 8.5 per cent higher than in May 2015.

Overall prices remain 33 per cent lower than their peak in 2007.

Economic analysts believe prices are being contained by tighter mortgage lending restrictions imposed by the Central Bank of Ireland, and have also warned of the potential impact of the UK’s Brexit vote.

Austin Hughes, chief economist at KBC Bank Ireland, said: “House prices are now showing reasonably solid positive momentum that is entirely consistent with the broader health of the economy at present.”

He warned that “in the near term, increased uncertainty regarding Brexit may have a dampening influence on demand”.

However, he added that “in the absence of a clearer picture on the precise nature and extent of the impact on the Irish economy, we would not expect a marked change in the current trend which is one of a gradual easing in the annual rate of house price inflation”.