January sees biggest monthly property price increase since August
Property prices increased by 1.8% in January — in the biggest monthly increase since August.
Economists have linked it to an easing in Brexit fears and strong income gains but they warned that any bounce is likely to be short-lived in the context of the coronavirus outbreak.
Data issued by the Central Statistics Office (CSO) shows that prices increased by 1.8% nationally in the year to January. This compares to an increase of 0.5% in the year to December and an increase of 5.2% in the 12 months to January 2019.
In Dublin, property prices increased by 0.5% in the year to January. The highest house price growth in Dublin was in Fingal at 4.9%, while Dun Laoghaire-Rathdown saw a decline of 3.6%.
Outside Dublin, prices were 3.1% higher in the year to January, with the border region seeing the highest increase of 9.2%. Overall, the national index is 17.3% lower than its highest level in 2007 and 84.7% higher than the low-point of 2013.
The Dublin region had the highest median price (€370,000) in the year to January. Outside Dublin, the highest prices were in Wicklow (€327,500) and Kildare (€309,999). In Cork city, buyers spent a median of €249,500, with those in Cork county spending €250,000.
When broken down by Eircode, all 10 of the most expensive areas to buy are in Dublin. In Munster, Kinsale (€345,000), Carrigaline (€306,969), Ballincollig (€315,000) and the southside of Cork city (€295,050) are the most expensive.
New-builds accounted for just over one-fifth of properties sold in January, while the market continues to be dominated by former owner-occupiers, who are responsible for 52.8% of sales. Some 31.9% were bought by first-time buyers and non-occupiers, which include investors, account for the remaining 15.3%.
Austin Hughes, an economist with KBC bank, said the increase is due to an easing in Brexit fears. But, he warned, it is likely to be short-lived:
"Downward pressure on house price inflation is likely to re-emerge through the first half of 2020 as the impact of the coronavirus and to a lesser extent the possibility of domestic initiatives on property by the next government weigh on homebuyers."
"In the months ahead, near term downside risk to house price inflation may come from two sources. First and foremost, concerns around both the health and economic fallout from Covid-19 may lead prospective homebuyers to postpone purchasing decisions.
"Second, expectations are high that the next Irish government will introduce significant policy measures in respect of both private and public housing."