herald

Thursday 21 September 2017

Dublin house prices 'to return to Celtic Tiger levels in 3 years'

House prices in the city
House prices in the city

House prices in the capital are set to hit Celtic Tiger levels by 2020 as the gap between rural and urban property prices becomes more stark.

A report by property website Daft.ie revealed how prices in Dublin increased at an annual rate of 8.7pc in the year to March, up from just 1pc at the same time last year.

The average price of a three-bed, semi-detached home in the capital is now €340,000, rising to €637,000 in Dublin 4. This is compared to a national average of €230,000.

A lack of housing stock has been blamed for the increases, which could see property in Dublin reach 2006 level prices within the next three years.

Report author Ronan Lyons told the Herald the trend of an "urban premium" for property in the capital is likely to increase in the coming years.

"It's sort of like a mini London effect," said the economist.

Decline

Many young apartment owners bought during the boom years in the hopes they could trade upwards to a house when the time was right to start a family.

Apartment prices have also been rising, having suffered a sharper decline during the crash.

For example, the average price of a one-bedroom apartment in south Dublin increased by 0.2pc to €254,000 in the period.

In the Dublin 1 area there was a 21.6pc increase, to €198,000 for a one-bedroom apartment.

However, Mr Lyons said it was unlikely people who bought at the height of the boom would see a full return to the price they paid for an apartment.

"I wouldn't be expecting them to get back to that price any time soon," he said.

However, he said the relative fall in value was not itself a major issue.

"What's important for the negative equity generation is what they owe."

He pointed out the longer payments are made on a mortgage, the greater percentage of the principal a borrower is paying back.

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