Property prices surge past Celtic Tiger record highs

August prices increased for the 24th consecutive month while there was a cooling in annual growth

A surge in new home sales is keeping prices elevated, according to the CAO. Photo: Niall Carson

Charlie Weston

House prices have now risen above their Celtic Tiger highs, despite an easing back in the annual rate of increase in values.

Prices were up by 12.2pc in the year to August. This is down marginally from a rise of 13.3pc in July.

A surge in new home sales is keeping prices elevated.

New home transactions were up 42pc in the three months to August, compared with the same period last year.

Existing home transactions are up 11pc.

The Central Statistics Office (CSO) said property prices were up by 1.3pc in the month.

This is a slightly faster pace of rise than in July when there was an increase of 1pc, with a rise of 1.1pc in June.

August saw prices grow on a monthly basis for the 24th consecutive month at the same time as there was a cooling in annual growth.

The continued rises in prices are despite mortgage interest rate hikes and a higher cost of living, which are expected to eventually take some of the steam out of the market.

Residential property prices nationally now stand at 2.2pc above their highest level recorded in April 2007 during the Celtic Tiger property boom.

However, in Dublin they remain 6.5pc lower than the peak recorded in the capital in February 2007.

Dermot O’Leary, economist at Goodbody Stockbrokers, said it was the fifth month in a row that the annual rate of growth slowed.

“Despite this, growth remains comfortably in double-digit territory and continues to show strong monthly gains,” he said.

Mr O’Leary said the housing market is proving more resilient than international experience, as Ireland is faced with an acute supply shortage.

The market is also seeing mortgage rates fall on an annual basis due to consolidation in the banking sector, implying increased competition with non-bank lenders.

“Nonetheless, we expect price growth to ease further from here and throughout 2023 as mortgage rates inevitably turn upward, and demand wanes further in the face of the cost-of-living crisis,” he said.

Mr O’Leary said the strong growth in transactions for new homes and elevated demand could make it difficult for people rushing to get house purchase over the line before mortgage rates begin to rise further.

Prices in Dublin were up by 9.7pc, with prices outside Dublin up by 14.2pc.

The region outside of Dublin that had the largest rise in house prices was the west, which consists of Galway, Mayo and Roscommon at 19pc.

At the other end of the scale, the south-west area consisting of Cork and Kerry, saw a 10.4pc rise in the year.

The median, or typical, price of a dwelling purchased in the year to August was €295,100.

The lowest median price for a house in the 12 months to August 2022 was €149,500 in Longford, while the highest median price was €615,000 in Dún Laoghaire-Rathdown.

The most expensive Eircode area over the last year was in Blackrock, Dublin, with a median price of €725,000.

The least expensive was Ballyhaunis, Co Mayo, which had median prices of €120,000.

In August, 4,295 home purchases were filed with the Revenue Commissioners, an increase of 14.1pc compared with the 3,764 purchases in August last year.

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