Property prices rise at fastest pace in two-and-a-half years

Residential prices were up by 5.5pc nationally in the year to May.

It was the fastest pace of increase in two-and-a-half years.

May’s surge compares with an increase of 4.6pc in the year to April, and an increase of 0.3pc in the 12 months to May 2020.

In Dublin, prices saw an increase of 4.9pc in the year to May, while property prices outside Dublin were 6.2pc higher, new figures from the Central Statistics Office show.

The highest house price growth in Dublin was in South Dublin at 6.6pc, while Fingal saw a rise of 4.3pc.

Outside Dublin, house prices were up by 5.7pc, and apartment prices shot up by 14pc.

The region outside of Dublin that saw the largest rise in house prices was the Border at 10.7pc.

The last time prices rose at a faster rate was in December 2018, when they were up nationally by 6.2pc on an annualised basis.

Prices are now up 93pc since they hit rock bottom in early 2013. They are now just 13.5pc off the peak they hit in 2007, the CSO said.

Households paid a median, or typical, price of €265,000 for a home in May. This is the same as the price for April.

The Dublin region had the highest median price at €392,500.

Within the Dublin region, Dún Laoghaire-Rathdown had the highest median price at €550,000, while South Dublin and Fingal had the lowest at €360,000.

The highest median prices outside of Dublin were in Wicklow at €360,000 and Kildare at €325,000, while the lowest price was €117,000 in Longford.

Meanwhile, a report commissioned by Cork Chamber argues that more private apartment projects are needed for the city.

The report found that no new private apartment schemes of scale have been completed in Cork since 2008.

As long as viability and affordability of apartments remains unresolved by Government, the delivery of new urban communities will remain a pipe dream, the KPMG-Future Analytics report prepared for Cork Chamber says.

It said the recent announcement of Urban Regeneration and Development Funding of €400m for Cork has instilled great confidence for the future, but unless the issue of apartment viability is addressed in the short-term the city will be compromised.

Separate figures from the Central Bank show that Ireland now has the third most expensive new mortgages in the Eurozone.

The average interest rate on new Irish mortgages was 2.80pc in May 2021, down 7 basis points on May last year.

The average for the euro area stood at 1.27pc, although the rate varied considerably across countries.

Ireland had the third highest mortgage interest rates across the euro area, after Malta and Greece.

Mortgages continue to be expensive here despite greater competition to the banks coming from non-bank lenders Finance Ireland and Avant Money.

Bankers say that regulatory requirements on how much capital they must set aside when issuing mortgages, and the difficulties in repossessing homes when no payments are being made, are the reasons for the higher cost of borrowing in the State.

The average first-time buyer mortgage is now around €250,000.

Someone borrowing this amount over 30 years is paying an extra €192 a month, or over €2,300 a year, compared with the average in the Eurozone, according to Daragh Cassidy of price comparison site Bonkers.