Irish Property Prices Rise – Look Closer, and That’s a Dublin Problem
The Irish property market shows signs of resurgence, with the latest data form the Central Statistics Office showing a price rise of 8.5% in the year to April 2014.
By comparison, 12 months previously, there was a 1.2% fall in prices to April 2013. While there are still hurdles to overcome, including the beginnings of a serious housing shortage in Dublin, there’s little doubt that the country as a whole is seeing the longed-for recovery at last.
On a monthly basis, residential property prices rose by 1.4% from March to April – again, inviting favourable comparisons with last years March and April figures, of -0.7% and 0.8% respectively.
Compared to its heyday, though, the Irish market remains severely depressed. It’s down by about half from its peak prices: in Dublin, house prices are 46.7% lower, and apartment prices are 54.2% lower than their February 2007 peak.
In the Rest of Ireland (the designation the CSO uses for Ireland excluding Dublin), it’s a similar story: residential prices are down by 47.4% down from their September 2007 peak, and nationally prices are 46.3% lower than their 2007 peak.
As we’d expect, the hottest Irish market is capital city Dublin, where residential prices rose by 17.7% year-on-year and 3.1% month-on month to April. There was little difference between the house price rise, of 17.8%, and the apartment price rate, of 17.5%.
In a twist we’re familiar with from other countries, if Dublin is excluded from the figures, there’s actually a slight fall in prices, with a 0.3% fall month-on-month and only a 1.2% rise year-on-year to April. Again, there’s a very small difference between the house and apartment rate.
The pattern of a general depression followed by a recovery that’s restricted to the capital city is a familiar one throughout Europe.
The Construction Industry Federation commented on the situation, with Director Tom Parlon saying, ‘these latest statistics should come as no surprise to anyone who has been following the property market. A shortage of supply means the level of demand is not being catered for and this is leading to an increase in prices in Dublin and certain other urban areas.’
It’s also leading to a rethink of what it means to be an Irish homeowner, as An Bord Pleanala, Ireland’s planning authority, told the Irish press. Instead Dublin will have to deal with what’s likely to be a mounting housing shortage by building duplex homes along major transport routes, without gardens and with families sharing parks and amenities.
While that’s unlikely to sit well with aspiring Irish homeowners, Pleanala chairwoman Dr. Mary Kelly warned that the board’s decision would be based on housing needs and the best use of infrastructure.
If you’re planning a move to Ireland, or looking at investment property, it’s worth remembering that some areas in and around Dublin will see big changes over the next decade or so as the Irish government builds to cope with its housing supply problems; in the meantime, Dublin prices are likely to see sharp rises. Outside the capital, though, Ireland still has bargains, fixers and holiday homes on offer, and while the recovery right now is slow, it’s likely to improve; now is the time to get in on the ground floor.