Irish property prices up 7.3 pct in year to September

Ireland's residential property prices rose by 7.3 percent in the year to September, according to new official figures released on Thursday.

This compares with an increase of 6.8 percent in the year to August and an increase of 4.2 percent in the 12 months to September 2015, the Central Statistics Office (CSO) said.

In Dublin, residential property prices increased by 5.4 percent in the year to September. Dublin house prices increased 5.7 percent whereas the price of apartments rose 6.0 percent in the same period.

Residential property prices in the rest of Ireland were 11.0 percent higher in the year to September. House prices in the rest of Ireland rose 10.9 percent over the period. Apartment prices in the rest of Ireland increased 12.5 percent in the same period.

Economists here attributed the increase of property prices to a lack of supply of houses throughout the country.

"A lack of supply of houses has clearly pushed up prices, particularly in the Dublin area in the past three years, but 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," said Alan McQuaid, chief economist with the Dublin-headquartered Merrion Stockbrokers.

But he said tighter mortgage lending restrictions imposed by the Central Bank of Ireland would help to contain house prices to some degree and would continue to have an impact going forward.

"There are also potential negative impacts from Brexit. Against that, the tax-incentive scheme for first-time buyers announced in the October budget will keep upward pressure on prices until new supply comes on the market," he said.

"Taking all the factors into consideration, we see house price growth remaining in positive territory on a year-on-year basis for a while yet, with the annual rate of increase set to hold in the 6 to 8 percent range in the final quarter," he added. Endit