Ireland's annual property prices up by 6.9 pct in May

Ireland's annual residential property prices went up by 6.9 percent in May, according to official figures on Wednesday.

But the figures from the Central Statistics Office (CSO) indicated the rate was the slowest annual growth pace since December of last year.

In Dublin, residential property prices were 4.8 percent higher than a year ago. Outside of Dublin, residential properties prices were 8.5 percent higher on a yearly basis.

Residential property prices in Dublin are 35.2 percent lower than at their highest level in February 2007. Residential property prices in the rest of Ireland is 35.7 percent lower than their highest level in September 2007. Overall, the national index is 33.2 percent lower than its highest level in 2007.

Commenting on these figures, Alan McQuaid, chief economist with the Dublin-headquartered Merrion Stockbrokers, said a lack of supply of houses has clearly pushed up prices, particularly in the Dublin area in the past three years.

He said it is not something that can be rectified overnight. "Until this issue is addressed, prices in the capital and its outskirts will likely remain elevated," he added.

However, McQuaid said tighter mortgage lending restrictions imposed by the Irish central bank are helping to contain house prices to some degree, and will continue to have an impact going forward.

There are also potential negative effects from Brexit, he said.

There was an average increase in property prices of 12.9 percent in 2014 and 10.6 percent in 2015, according to the CSO.

McQuaid predicted there will be a more modest increase of 6 percent to 6.5 percent in 2016.

Irish real estate sector has been seriously affected by the burst of the bubble. The bubble was an extreme increase in the price of real estate from the late 1990s to 2007 in a period known as the Celtic Tiger. The fall in domestic and commercial property prices contributed to the Irish banking crisis. Enditem