The CSO’s Residential Property Price Index has shown that the price of residential property increased by 0.2% on a national basis during May 2016. The growth in prices declined marginally in comparison to March and April when prices increased by 0.3%. On an annual basis, prices nationally are now 6.9% higher.
In terms of Dublin, prices increased by 0.1% during May 2016. In comparison to a year earlier, prices have increased by 4.8%. House prices in Dublin increased by 0.4% and are now 5.7% higher when compared with May 2015.
Prices rose by 0.1% in the Rest of Ireland in May 2016. The Rest of Ireland also had the strongest annual rate of growth as prices increased by 8.5% in comparison to May 2015.
The continuing shortage of residential property in Ireland’s urban centres is the main factor behind the strong annual increases in property prices observed in the latest edition of the CSO’s Residential Property Price Index. Despite these strong increases, the Central Bank’s mortgage lending criteria continues to have a considerable moderating effect on price growth. This is highlighted by the fact that prices increased nationally by 13.8% in the 12 months to May 2015.
The June edition of the CSO’s Residential Property Price Index will be closely watched in order to ascertain if there has been any impact on the market as a result of Brexit. While for now the impact remains uncertain, there is the potential for Brexit to have both a positive and negative impact on the market. Brexit could affect consumer confidence, resulting in homebuyers choosing to postpone property purchases. On the other hand Brexit may incentive British firms to relocate some of their operations to Ireland, which in turn may increase the demand for housing as their employees search for somewhere to live.