The government’s Shared Equity Scheme for first-time buyers could be extended to secondhand homes
Property prices continued to increase in July, buoyed by strong demand for first-time buyers and a lack of supply. The price of property is up despite a slew of mortgage interest rate rises.
Prices were up 1.5% in the year to July, the Central Statistics Office (CSO) said. They rose in the month also, up by 0.3% compared with June. However, prices fell by 1.4% in the year in Dublin.
Outside Dublin, the residential property price index shows that prices rose up by 3.8%, the CSO said. The figures show a fall-off in the number of transactions. In July some 4,174 dwelling purchases by households at market prices were filed with the Revenue Commissioners. This is down by 6.1% when compared with the 4,443 purchases in July last year.
Average Housing Price
The median price of a dwelling purchased in the 12 months to July 2023 was €320,000. The lowest median price for a house in the 12 months to July 2023 was €160,000 in Longford, while the highest median price was €630,000 in Dún Laoghaire-Rathdown.
CSO statistician Niall Corkery said: “Residential property prices rose by 1.5% in the 12 months to July 2023, down from 2.1% in the year to June 2023. In Dublin, residential property prices saw a decrease of 1.4%, while property prices outside Dublin were 3.8% higher in July 2023 than a year earlier.”
Impact of interest rate rises
Prices continue to rise despite a surge in mortgage interest rates. The average rate has gone up by around 1.50 percentage points, and is just over 4%. Rates of half of this level were available a year ago. But there is strong demand for property due to demographic change, a shortage of homes for sale and high rents which is encouraging people to try and buy their own home.
And the State schemes to help new buyers are also fuelling demand. First-time buyers can knock up to €100,000 off what they have to borrow for new homes by combining two State support schemes. Buyers who avail of both the new First Home shared equity scheme, along the Help-To-Buy tax refund, are managing to buy €320,000 homes with mortgages of just €240,000. One commentator said this was acting like “rocket fuel” to propel people onto the property market. But it may also be fuelling continued rising house prices.
In Comparison to the 2007 peak
The CSO’s national property price index has now reached a value of 167.4, which is 2.3% above its highest level at the peak of the property boom in April 2007. Dublin residential property prices are 8.9% lower than their February 2007 peak, while residential property prices in the Rest of Ireland are 3.6% higher than their May 2007 peak.
Growth in the last 10 years
Property prices nationally have increased by 128.2% from their trough in early 2013. Dublin residential property prices have risen by 125.5% from their February 2012 low, while residential property prices in the Rest of Ireland are 138.3% higher than at the trough, which was in May 2013.
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