According to the CSO’s latest Residential Property Price Index, prices in Dublin increased by 3.0% on a monthly basis in May 2017 – the largest monthly increase in nearly three years. As a result, prices in Dublin are now 11.2% higher on an annual basis. Meanwhile, the latest research by Knight Frank has shown that Dublin has moved from 80th to 53rd in the global rankings, for the year to Q1 2017.
In total, the Knight Frank Residential Cities Index increased by 6.9% in the year to Q1 2017 – the fastest rate of growth since Q4 2013 – while Chinese cities continue to dominate the rankings accounting for seven of the top ten index entries. However, the introduction of tighter regulations in the form of loan-to-value ratios and limits on second home purchases is resulting in a slowdown in the pace of house price growth with the average price change across all 20 Chinese cities tracked by the index declining from 19.2% last quarter to 15.9% this quarter. This was particularly evident in the decline of Beijing and Shanghai which fell from 3rd and 6th position to 13th and 12th position respectively. The influence of Chinese buyers is also extending beyond the Chinese border, in particular to Canada, where demand is pushing up house prices resulting in the need for more stringent regulations. In Vancouver, the introduction of a 15% foreign buyer’s tax last August, primarily aimed at Chinese buyers, has seen annual price growth decline from 25.8% in August 2016 to 12.2% in March 2017. It is looking increasingly likely that Toronto’s prices, which increased by 24.8% in the year to Q1 2017, could follow suit on foot of the introduction of a similar 15% foreign buyer’s tax in April. In Europe, Oslo leads the rankings with prices accelerating by 21.0% on an annual basis followed closely by Reykjavik and Budapest where prices increased by 18.1% and 17.1% respectively.
In other news, a report by Eurostat has highlighted Ireland’s favourable demographic characteristics which will provide a natural long-term source of demand for housing. According to the report, Ireland had the highest crude birth rate in the European Union with 13.5 per 1,000 residents as well as the lowest crude death rate of 6.4 per 1,000 residents. Consequently, Ireland (with a natural change of its population of +7.1%) remained in 2016 the member state where births most outnumbered deaths.