Irish property prices up 8.1 pct last year

Residential property prices in Ireland increased by 8.1 percent in 2016, according to official figures released on Friday.

In 2015, the figures from the Central Statistics Office (CSO) showed there was an increase of 4.6 percent.

In Dublin, residential property prices increased by 5.7 percent last year, the CSO said. Dublin house prices increased 5.8 percent whereas apartments went up 7.9 percent in the same period.

The CSO figures also showed that residential property prices outside of Dublin outpaced growth in the city.

Residential property prices outside of Dublin were 12 percent higher last year, according to the CSO.

The CSO added that from the trough in early 2013, prices nationally have increased by 49.1 percent. In the same period, Dublin residential property prices have increased 64.3 percent, whilst residential property prices in the rest of Ireland are 46.6 percent higher.

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

"A lack of supply of houses has clearly pushed up prices, particularly in the Dublin area in the past few years, but it is not something that can be rectified overnight," said Alan McQuaid, chief economist with the Dublin-headquartered Merrion Stockbrokers.

"Until this issue is addressed, prices in the capital and its outskirts will likely remain elevated, even with Brexit-related risks," he said.

The easing of mortgage lending restrictions imposed by the central bank combined with 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, according to the Irish economist.

"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 six to nine percent range over the next few months," he added. Endit