The Herald - National Edition*

Thursday, 29 May 2014

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Dublin house prices soar
18pc
as buyers feel heat
By
Fiona Dillon
DUBLINS housing market is in
the process of going from lukewarm
to scalding hot, according
to a leading economist.
The warning from Conall
Mac Coille, chief economist
at Davy comes as new figures
from the Central Statistic Office
(CSO) revealed that residential
property prices grew by around
three per cent in Dublin in
April, and were nearly 18pc
higher than a year ago.
Apartment prices in the city
were 17.5pc higher, when compared
with the same month
last year.
CAUTIONED
However, the CSO cautioned
that the data for apartments
was based on low volumes of
transactions.
The same marked increase
was not seen outside the capital,
where the price of residential
properties fell slightly by 0.3pc
in April. They were just 1.3pc
higher than the same month
last year.
The CSO figures showed however
that residential property
prices in Dublin are still nearly
50pc lower than their highest
level in 2007.
The Construction Industry
Federation (CIF) has warned
that the housing market in
Dublin with be susceptible to
large house price jumps until
the supply issue is resolved.
Director General Tom ParIon
said: 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.
Last year only 8,301 units
were completed throughout the
country, including just 1,360
units in Dublin.
This year the market is likely
to have a maximum of 10,000
units built nationally and less
than 2,000 in Dublin. That
simply isnt enough.
You cant just flip a switch
and have more housing. It takes
18 months to two years for large
housing developments to be
brought to market. Given the
time frames involved, we cant
afford to delay, we need to take
action soon, he added.
The longer it takes to fix
the problems, the greater the
impact it will have on house
prices, said Mr Parlon.
Meanwhile, the Irish Banking
Federations (IBF) housing
market monitor for the first
quarter of 2014, which was
published yesterday, showed a
number of recovery trends in
the housing market, including
strong growth from a low base
in both the level of mortgage
approvals and draw-downs.
FRUSTRATED
Speaking about the figures,
economist Conal Mac Coille,
said that prices are only going
one direction.
Dafts latest survey shows
house prices expected to rise
by 20pc over the next five years
in the capital, he said. With
buyers increasingly frustrated
by the lack of available properties,
expectations for even
stronger price inflation, well
beyond 20pc will surely grow.
This poses the danger that
first-time buyers will desperately
stretch their finances
unsustainably.
fdillon@herald.ie