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THE CENTRAL STATISTICS Office’s (CSO) latest property price index figures have been released today and they serve as a sober reminder as to why the Central Bank has seen fit to introduce new mortgage rules.
Residential property prices across Ireland as a whole have increased by a massive 16.3% in 2014. By comparison, the same statistic for 2013 stood at 6.4%.
However, a clear two-tier system is now in effect as prices in the capital increased at more than twice the rate of dwellings in the rest of the country.
Dublin’s prices are now 22.3% greater than they were a year ago, with the same figure for the rest of Ireland standing at 10.2%.
While the Central Bank’s new rules (chiefly concerning minimum levels of deposits that must be saved prior to the granting of a mortgage) are designed to stem the growth of a new property bubble, Ibec group Property Industry Ireland (PII) have voiced concern at the one-size-fits-all nature of the rules.
PII represent businesses working in the residential property sector and their director Peter Stafford, while approving of how the Central Bank arrived at their decision, believes there is room for a more dynamic approach.
“It’s good that the Central Bank recognises the role they have to play, and it’s good both how they arrived at this decision and the relatively benign time they’ve picked to implement it,” he told TheJournal.ie.
The downside is the scale of number they are talking about. 20% is still a huge amount, particularly for first time buyers.
Prices are fragmenting rurally and generally behaving very differently from those in Dublin.
The real impact of the Central Bank’s policy will need to be carefully monitored in light of these trends.
Preventing a new bubble should not be at the expense of regions which are only just starting to recover.”
Our submission to the Central Bank recommends the introduction of key performance indicators (KPIs) for the housing market, and Patrick Honohan’s suggestion regarding special recognition for both modest borrowers and those who live in Dublin is a very relevant one also.
“If there are continued shortages of housing in high-demand areas it will both undermine quality of life and Ireland’s competitiveness. Affordability is a social issues as well as an economic one,” Stafford added.
While property values are still increasing at a rate of knots, they remain well below their highest levels reached during the boom years.
Dublin properties are 37.7% lower than their peak of February 2007, while residences in the rest of the country are still 41.4% lower than the level reached in September 2007.
The monthly release by the CSO is the most comprehensive study taken into property values in Ireland, and the index on which many of the banks’ mortgage models are based.
The data is compiled from information on mortgage drawdowns provided each month by eight of the main mortgage lending institutions in the state.
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Referencing boom prices and making it sound like something we should be striving to attain again is getting real old. We all agree those were unsustainable, so why do so many articles read like this is where we want to end up again.
Because the Daft media outlet aka The journal does want them to rise to those levels again.
Who the hell needs an acronym PII. It’s giving them an importance they don’t deserve. Acronyms have become stupid.
New rules of max loan 3.5 times salary is not fair. The mortgage on that is less than the rent I pay. Where are the rules for rent. And the rich get richer and poor poorer – nothing changes.
The rules on mortgages are not unfair, the rules, or lack thereof, on rent are unfair.
That’s the last significant jump we’ll see thanks to new CB rules.
Great to see we learned our lesson
I remember being told on here couple of years ago that I was mad because I was going to buy my house. The experts on here told me the market still had to drop 25%. 2 years on my house increased by over €110000
Give yourself a pat on the back champ
@Alan: So what? Unless you planning to sell it and take the price rise then it’s irrelevant how much it went up (or down).
House price rises only matter to those about to sell or trying to buy.
Well at the time taught I took big gamble as they where falling and if it was today’s prices I would not be able to buy it.
…and what if they had fallen after you bought. You still would be able to afford your mortgage. Yes you would be in negative equity but so what. As has been stated, it only matters when you sell. So you got lucky… and yes it was luck, especially if you were on here looking for advise. You’ll not get much praise for it. The sooner irish people stop linking their self worth to the value of their home the better off we will all be. Enjoy your home regardless of its value.
Oh Alan. The irony……
Well if I lost my job and the price was down would be big problem. No luck involved I took a calculated risk based on exports numbers service and manufacturing monthly PMI’s
Ya gotta love these comments. When the investment goes pear shaped it’s the banks fault for reckless lending but when gamble pays off its all no luck involved, was all me haha, I need to show everyone on journal now!! If only predicting house prices was only as easy as analysing exports numbers or other stat bases findings. 110k rise in you must have landed a whopping bargain!! Must get my hands on the latest exports figures asap
Where is the regulation involved in stopping such crazy price rises ?
You’d think we could learn from our mistakes as a society.
Greed is the bottom line.
And up goes the cost of your Home Tax. Sadly all the gael & labour fanboys will be creaming themselves at the prospect. Idiots.
Quick everyone buy your houses now before they’re unaffordable. Again
Ahead of GDP, ahead of inflation(deflation), ahead of income growth, ahead of GNP and ahead of affordability.
Absolutely stupid……why is rampant house inflation always regarded as goo news?
A bit unfair that first time buyers can borrow more. Gives them the edge on families wanting to move to their dream home.
In any way my point is that 2 or 3 year’s ago people where being told there may for going to buy now we are back where people are going mad to buy. Big switch in 2ish years
What?
Headline “going up” – present tense,
then “rose by” – past tense. Article stats refer to last year growth in residential prices artificially stimulated in no small way by the cgt exemption availability which closed end 2014. No evidence that this rising trend continues at present – if anything prices in Dublin seem to have peaked and are falling slightly.
And we cant control our interest rate.. Boom.. Bust.. (add debt).. Boom.. Bust (add debt)..
have your say