Dublin home prices rose in August by the most in more than six years on an annual basis, adding to evidence of a stabilization in the economy.
Residential property prices in the Irish capital climbed 10.6 percent from a year earlier, the most since April 2007, Ireland’s central statistics office said today. Across the country, prices increased 2.8 percent from a year earlier and 0.9 percent from the previous month.
“There is no doubt that lack of supply has driven Dublin house prices up,” said Alan McQuaid, chief economist at Merrion Capital in Dublin. “The recent signs of general improvement in the labor market and on the jobs front should help sustain the housing market recovery, especially in Dublin, but it may take some time for the rest of the country to pick up.”
Irish home prices have fallen by 49 percent since peaking in 2007, pushing the financial system to the bring of collapse. Now, signs are emerging that the economy is stabilizing, with unemployment beginning to drop.
The country’s economy expanded 0.4 percent in the second quarter, ending its second recession since 2008. Payrolls have risen in recent months, while manufacturing and services have strengthened.
While prices soared in Dublin, the country’s largest city, they fell 2.6 percent in the rest of Ireland, the statistics show. They gained 0.1 percent from July.
“The market is likely to remain a two-tier one,” Ryan McGrath, an analyst at Cantor Fitzgerald LP, wrote in a note to clients today. “We note the encouraging decline in unemployment in recent months but, again, there is likely to be a bias towards Dublin at the expense of rural areas.”