Dublin house prices climb 12.3pc

The new CSO figures paint a positive picture of the country’s property market following a severe housing crash. Prices across Ireland rose in September 2013 by 1.8 per cent, taking values to 3.6 per cent higher than September 2012. This year-on-year growth marks an improvement upon the 2.8 per cent recorded in August. Indeed, prices are now rising at their quickest rate since September six years ago.

Do not pick up your celebratory pint of Guinness just yet, though: the recovery is being driven by Dublin. The capital’s property market has seen values surge 12.3 per cent year-on-year. Dublin house prices grew 3.9 per cent from August 2013, while apartment prices also increased by 11 per cent from the previous year; a promising sign of growth, even though apartment prices had a lower base to recover from.

Outside of Dublin, the recovery is far less pronounced: prices excluding the capital fell 2.6 per cent in the 12 months to September.

Nonetheless, Ireland property prices have risen for the fourth month in a row. Values in Dublin are now 49 per cent below their market peak in 2007 (apartment prices are 59 per cent below peak). Any improvements are now being driven by cash investors and a shortage of supply, Davy Stockbrokers explains to the Irish Times. Indeed, cash buyers made up 54 per cent of national sales in the second quarter of 2013.

David McNamara comments: “[The divide] points to a market currently supported by a lack of supply, with an influx of cash buyers compensating for weak mortgage lending.”

“Evidently, cash buyers are attracted by rising rental values, attractive yields and the current perception of property as undervalued.”

McNamara predicts that outside of Dublin, prices will fall in the “oversupplied regions”.