House prices likely to climb this year, with stronger growth outside Dublin

Dublin asking prices fell for a second consecutive quarter

House prices, growth, Dublin, Galway, Cork, Limerick, MyHome, report, Conall MacCoille

Image: MyHome.ie

House prices are expected to rise by 5% this year according to the latest report from MyHome.ie.

Growth will be stronger outside of Dublin - with prices in Galway set to rise by 12%.

It also says prices in Meath will be up 16%, 10% in Kildare, Clare and Louth and 8% in Cork and Laois.

The report says the increase is down to the ongoing economic recovery, but it says house price inflation will start to level off this year.

The average asking price for a house in Ireland rose by 7.4% in 2015, with the national average for a new home standing at €215,000.

However that number rises to just 2.6% in Dublin, at €312,400.

It finds that income growth is now accelerating, driven by public and private sector wage increases, tax cuts and the introduction of a higher minimum wage.

"The lack of supply in many urban areas also remains acute. So a single-digit gain in Irish house prices, close to 5% seems likely through 2016", it says.

Source: MyHome.ie

Angela Keegan, managing director of MyHome.ie, said that while the low level of new house building was a concern it was encouraging to see the recovery in property prices spread to many parts of the country.

"The Department of the Environment, Community and Local Government indicated that there were just 10,000 housing completions in the year to October with the final end-2015 figure set to be close to 12,000. This is well short of the 25,000 units per annum which are needed to meet demographic demand", she said.

"At the moment the level of house building remains close to its weakest level since the 1970's and this needs to be addressed as a matter of urgency".

"While it is encouraging to see property prices recovering around the country the low level of transactions and the exceptionally illiquid nature of the market here remains a concern, the transactions figure for 2015 - at the time of writing - is over 45,000".

"This represents just 2.5% of the housing stock of 2 million homes and means the average property is being sold just once every 44 years", she added.

Chief economist with Davy, Conall MacCoille is the author of the report. He told Newstalk Breakfast that the lack of supply is a problem.