Average home price tops €500,000 in Dublin as property price inflation nationwide hits 14%

Average home price tops €500,000 in Dublin as property price inflation nationwide hits 14%

The price of an average house in Dublin topped half a million euro last year as buyers scrambled to purchase a limited number of new and secondhand homes.

Property prices surged by 14.4 per cent across the State in 2021, according to the Central Statistics Office, the strongest level of growth in the market for nearly seven years.

The figures come amid a sharp pick-up in inflation generally. Property price inflation was running at just 2.2 per cent in 2020.

A number of factors – including the ongoing shortfall in supply, increased savings and remote working – have triggered an acceleration in prices since the start of the pandemic.

Dublin prices – where the average price was €506,667 – compare with a national sales figure of €326,457 last year.

First-time buyers need to have income of over €130,000 to qualify for a mortgage to buy in Dublin at that average price under Central Bank rules. Existing homeowners, who require a larger deposit, are looking at an income threshold of close to €116,000.

Homes in Dún Laoghaire Rathdown continue to be the most expensive, with the average price in that council area breaking through the €700,000 level at €701,956. South Dublin was the most affordable of the city’s four local authority areas, with an average price of €404,936.

Outside of Dublin, the Mid-East was the most expensive region, with a mean price of €339,157. Wicklow was the most expensive county, with a mean price of €433,364.

The Border region was the cheapest place to buy a home, with an average price of €167,485. Longford (in the Midland region) was the least expensive county in the State with a mean price of €145,815.

Headline price inflation in Dublin, where supply pressures are most acute, was 13.1 per cent: outside the capital, prices rose even faster – up by 15.4 per cent.

Rise in transactions

The CSO also reported a sharp rise in the number of transactions completed in December, up by 13.2 per cent on November to 5,170. They were valued at €1.8 billion.

Property prices nationally have increased by 114 per cent from their trough in early 2013 while prices in Dublin have risen 119.6 per cent from their February 2012 low.

“The impact of inflation is being felt across a broad spectrum of goods and services, and property prices are no different,” said Trevor Grant, chairman of the Association of Irish Mortgage Advisors. “However, while the growth in property prices remains strong, we would expect this to slow as the year progresses.

“This is due to the anticipated increased supply coming on stream, and the Central Bank’s macroprudential rules kicking in, as exceptions potentially diminish or become harder to obtain, and borrowing power is reduced accordingly,” he said.

Umbrella group Brokers Ireland sai

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