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House prices up 2.1% in three months, new study shows

The average price of residential property in Ireland had risen by 2.1% during the opening three months of 2018, according to a new report by Sherry FitzGerald.

This compares to an increase of 1.9% recorded in the same period in 2017.

Average prices in Dublin rose by 2.3% in the first quarter, compared to 1.8% recorded in the same period in 2017.

The rest of Ireland saw an increase of 1.7% in the quarter, compared to growth of 2.0% recorded in the opening quarter of 2017.

The regional centres of Galway, Cork and Limerick also experienced price growth of 2%, 1.1% and 0.9% respectively over the three-month period.

Commenting on the results, Marian Finnegan, chief economist, Sherry FitzGerald Group said; “The continued strength of price inflation during the year to date is evidence of the persistent misalignment between supply and demand.

"It is very clear that moderate price inflation will only be achieved through a notable increase in the stock of residential property.”

The analysis of the stock of property advertised for sale in the open market in January 2018, reveals that availability had fallen to approximately 21,200 units.

Current stock represents just 1.1% of the total private housing stock.

There were 3,100 properties advertised for sale in January 2018, representing just 0.6% of Dublin’s private housing stock.

The quantity of property available for sale on the open market has fallen steadily over the past eight years, with the latest figure standing 61% lower than in January 2010, when 54,100 units were advertised.

The latest available data from the Property Price Register reveals that just over 54,000 transactions were recorded over the course of 2017.

Excluding multi-family/portfolio sales, the figure falls to approximately 50,900, representing an increase of 14% on 2016.

In Dublin, the volume of sales grew by 18%, with approximately 16,650 transactions taking place in the twelve-month period

Ms Finnegan noted; “The results of our latest analysis of the residential market reveals a market where supply constraints and elevated price inflation persist.

"However, there is evidence of a significant increase in the volume of new home sales, which is to be welcomed.

"This is particularly notable in Dublin and the surrounding counties all of whom experienced a double-digit increase in the volume new home transactions in the year.

"The fall in the median price of a new home sold in Dublin reflects the increase in the volume of starter homes, which underpins the success of the ‘help to buy’ scheme.

"With this in mind, it is worth noting that the ‘help to buy scheme’ is due to cease in 20 months' time.

"Given its success to date it is appropriate to suggest that consideration be given to extending the term of the ‘help to buy scheme’ until such time as the starter home market returns to equilibrium.”

- Digital desk