House Price Inflation to Accelerate by Year-end – Davy Research
House price inflation is expected to accellerate by year-end, according to research published by Davy Research on Monday. The analysis by David McNamara cited CSO house price data for October which showed another strong gain on the month with prices up 0.8%.
On the year, inflation is now running at 7.1% nationally and 6.1% in Dublin. Overall, inflation is set to accelerate to 8% by year-end and this momentum should be maintained into 2017 as Help-to-Buy and new Central Bank mortgage lending rules for first-time buyers kick in.
CSO data shows that, overall, the national index is 32.4% lower than its highest level in 2007. Dublin residential property prices are 32.7% lower than their February 2007 peak, while residential property prices in the Rest of Ireland are 37.1% lower than their May 2007 peak. From the trough in early 2013, prices nationally have increased by 48.4%. In the same period, Dublin residential property prices have increased 64.7% whilst residential property prices in the Rest of Ireland are 44.7% higher.
The research notes that completions have picked up in 2016 but are set to end the year at about 14,600, well below demographic demand. Planning permissions data, issued on Monday, should provide an indication of the pipeline of new supply in 2017. A gradual recovery to 25,000 units by 2020 is expected.
