Property prices rise again in May, but fall in Dublin

Property prices rose again last month, according to the latest official figures.

However, there were strong signs the annual rate of inflation may be moderating following the introduction of new lending restrictions.

Figures from the Central Statistics Office (CSO) show residential property prices nationally rose by 0.5 per cent in May and are now 13.8 per cent higher than a year ago.

Dublin property prices, however, fell by 0.1 per cent in May, reflecting an annual inflation rate at 15.2 per cent.

Dublin house prices fell by 0.2 per cent during the month while apartment prices in the capital rose by 0.4 per cent.

Outside Dublin, property prices rose by 1.1 per cent in May, and were up 11.9 per cent compared with the same month last year.

Nationally, residential property prices remain 37.5 per cent lower than their peak in 2007.

In Dublin, prices overall are still 38.1 per cent lower than their boom time levels, with house prices 36.4 per cent and apartment prices 41.9 per cent lower than their peak.

Outside of Dublin residential property prices were 40.8 per cent lower than their highest level in 2007.

Economist Alan McQuaid of Merrion Stockbrokers said the lack of supply of houses has pushed up prices, particularly in the Dublin area in recent years, but it is not something that can be rectified overnight. He said planning permission data shows a jump since the second half of 2014, indicating things are starting to improve on that front.

Taking the figures from previous years into consideration, and assuming price rises continue to moderate over the rest of the year, Mr. McQuaid said an average increase of around 9.5 per cent is projected for 2015.

“We may see a further cooling off in price growth from September when all the house hunters with legacy loan approvals have done their deals. In the longer term, there could be an offsetting pick-up in investor activity as rising rents are making buy-to-let returns look increasingly more attractive than bank deposits,” said Dr. John McCartney, director of research at property consultants Savills.