Significant increase in property prices outside Dublin

There has been a sharp rise in the cost of buying residential property outside of Dublin in the past year, various reports show.

Two newly released Irish property market reports from Daft and MyHome.ie are the latest to suggest that asking prices for newly listed homes in Ireland, particularly outside of Dublin, increased in the three months to the end of June this year.

While both reports indicate prices in Dublin are stabilising, Daft recorded annual increases of around 14%, 15% and 17.5% in Galway, Limerick and Waterford cities in the year to the end of June.

Overall, it said that residential property prices in Ireland rose by an average of 6.3% in the year.

Meanwhile, the Myhome report in association with Davy revealed that asking prices in Ireland rose by 5% nationally, and by 3.6% in Dublin in the second quarter of 2016.

The supply-demand imbalance across much of Ireland saw the average time to sale agreed fall to just four months, according to the report.

The notable gains in asking prices mainly reflect the recovery in house prices across the country with newly listed properties in Dublin rising by a more modest amount.

The mix adjusted asking price for new sales nationally is now €231,000 (£196,500) and €326,000 (£277,200) in Dublin, a rise of €11,000 for both markets compared with the first quarter of the year.

For the entire stock of properties listed for sale on the MyHome website the national mix adjusted figure is €213,000 (181,110), up 2.5%, the biggest quarterly increase for 10 years. In Dublin the figure is €296,000 (£252,000), up 2%.

The author of the report, Conall MacCoille, chief economist at Davy, said: “Not surprisingly properties are selling increasingly quickly with the average ‘sale agreed’ time falling to just four months, a new low. Outside of Dublin it has fallen to 4.8 months, the first time it has fallen below five since the financial crisis of 2008. While the government has outlined ambitious housing plans, there is no prospect of the shortage of housing supply being alleviated by new construction in the near term.

“At the same time, home buyers are feeling the heat and reacting to the lack of supply by taking out ever higher mortgage debts, helped by rising wages and growing consumer confidence. In May the average mortgage approval for house purchase rose to €208,000 [£176,900], the first time that the average mortgage approval has exceeded €200,000 [£170,000] since the series began in 2011.”