Dublin home prices rose the most in six years in September, the latest sign that Irish residential property prices are stabilizing after the country’s decade-long real estate bubble started to deflate in 2007.
Home prices in the Irish capital rose 2.4 percent from a month earlier, the biggest gain since August 2006, the Central Statistics Office said today. Residential property prices nationwide rose 0.9 percent in September, marking the third consecutive month of gains.
“Anecdotal evidence points to pent-up demand for family homes, especially in certain areas of Dublin,” said Alan McQuaid, chief economist at Merrion Capital in Dublin. “While the figures are encouraging, I think it is too early to say whether house prices are on a steady upward rise.”
Irish property prices are gaining after homes lost half their value since a property crash pushed the nation to the brink of insolvency and the unemployment rate tripled. A lack of bank credit and the end of tax-relief measures for new buyers next year along with high unemployment will weigh on the housing market, according to McQuaid.
Ireland’s unemployment rate was unchanged at 14.8 percent in September. New Irish mortgages granted in the second quarter declined 16 percent to 524 million euros ($678 million) from the same period a year earlier, the Irish Banking Federation said in August.
“For homes in well-established parts of Dublin, demand is outstripping supply,” Aoife Brennan, head of research at Lisney, an Irish broker, said in a statement today. “In recent months, cash buyers have been making up about 40 percent of the Dublin market.”
The CSO data is compiled with mortgage data from lenders. Dublin home prices would show a bigger increase if cash purchases were included, according to Lisney.