Dublin house prices rose by 8% since this time last year, according to the CSO, yet there is no guarantee it will continue in this direction.
Significant recovery in the housing market is not yet on the horizon with the banks limiting mortgage lending yet again and very few properties changing hands.
The CSO recently published its latest house price index confirming Dublin house prices had risen by 8% in the last 12 months which caused intrigue. This is obviously good news for Dublin house or apartment sellers, but not for the rest of the country as average prices outside of Dublin fell by 1.5% over the same period.
Until recently, prices had been falling for more than five years, but it looks as though this small bit of good news may not be enough to ensure the property price crash ends any time soon. The CSO house price index excludes cash purchases, which appears to be much more of a regular occurrence these days with fewer mortgages being granted.
Figures published by the Irish Banking Federation recently revealed that while 2,852 mortgages were drawn down during the second quarter of 2013, 5,642 houses and apartments were purchased. Therefore, almost 50% of purchases were cash purchases during this period.
CSO figures are only recording mortgage assisted purchases. But looking at records of auctions of repossessed properties for cash, it would appear that prices are down by 60% or more rather than the 50% suggested by the CSO price index.
Understanding the full extent of the current housing market is further inhibited by the fact that transaction volumes have dried up, for both mortgage and cash purchases.
Just over 10,000 houses and apartments were purchased in H1 2013, according to the IBF. While this shows an increase of more than 10% on the total for the same period last year, it is unlikely that this figure is to repeat for H2 2013. The number of housing purchases in H2 2012, over 15,000 purchases, was exaggerated due to the number of tax breaks for first-time buyers that expired at the end of last December.