Dublin house prices rise €8,100 in just one month
Property prices in the capital are now rising as fast as they did at the height of the boom.
New statistics show that Dublin home prices rose by 2.7pc in July - representing an €8,100 increase on the value of a €300,000 house in just over four weeks.
First-time buyers, who are already struggling to get on the property ladder, are now seeing their saved deposits nullified by price rises within just a few months.
The July increase is almost exactly in line with the 2.8pc hike experienced during the same month in 2006, the last summer period of the boom when the Dublin market was at its hottest.
It now appears that the market recovery is also gathering pace outside Dublin. Nationally, house prices rose by 2pc in July.
City house prices have now increased in value by almost a quarter (23.2pc) year on year and are running at 0.7pc per month ahead of the national average.
The figures released by the Central Statistics Office (CSO) indicate that Dublin home prices have now had 12 successive months of double-digit gains, on a year-on-year basis.
Despite the jump, house prices in Dublin are still running at 41.2pc lower than they were in February 2007, the peak in prices in the capital, the CSO said.
Apartment prices have even more to regain as they are running at 48.4pc lower than they did at the peak.
However, apartment prices rose most in the capital at 26.3pc in the year to July compared with the same month in 2013.
The CSO warned that the study group for apartments was low and therefore might not be totally representative.
And property prices may be rising even faster in the capital overall than the CSO suggests because the State's statistics machine does not take cash transactions into account and these are most prevalent in the city market.
Despite a report published this week estimating that cash buyers have been reduced to 35pc of purchases nationwide, market sources believe that cash still accounts for more than 40pc of sales achieved in Dublin.
This is where investor activity is now at its most frantic, accounting for more than one in five purchases.
Nationwide house prices have risen in the year to July by 13.4pc compared with 12.5pc in the year to June.
And indicating that the property recovery has now spread across the country, the July increase for homes outside the capital was 1.3pc - or a €4,500 increase on the value of a €300,000 rural home.
This compares with a 1.5pc increase in July 2006.
John FitzGerald, senior economist with the ESRI said: "The annual figures show a substantial rise which could continue for some time.
"This is a supply issue and it is also population linked."
He added that the latest house price data tied in with population statistics released this week which showed that emigration is falling and the population is growing.
"If we look to cities across the developed world where populations are increasing and where they are not building more homes, we can see the exact same thing happening.
"Prices in London are outrageous and they're also high in Paris. In contrast, Berlin, which has not seen population growth has remained relatively cheap."
He added: "We have simply got to build more houses - but we'll probably have to wait until prices rise to the degree that it makes building them profitable once again."
Mr FitzGerald said that prices still had a long way to go to reach their former peak but said that the speed of the increases remained a "cause for concern".
"Rising house prices are not a good thing generally," he said.
"They will impact on our competitiveness and will ensure that the next generation ends up staying at home with their parents."
While more people are now moving home, having been released from negative equity by recent price rises, it is a difficult market for those seeking to buy.
Earlier this month, the ESRI warned that Dublin is on the verge of running out of housing stock. It says a rise in population will mean more than 54,000 housing units will be needed in Dublin, by 2021 - while more than 23,000 units will be needed in counties Louth, Meath, Kildare and Wicklow.