Wealth BlogForeign investors drive up Dublin property prices
I know you all love property investment stories. Monitoring property prices has proved a reasonably useful guide to the pace of recovery in the blighted Eurozone. Of the PIGS, (Portugal, Ireland, Iceland, Italy, Greece and Spain,) Ireland had the biggest bubble and crashed the furthest. Having only a tiny population, about half the size of Hong Kong and scary levels of both negative equity and mortgage arrears, only a year ago Ireland faced an impossible climb to get the economy going again. With galloping emigration and unemployment, it seemed impossible.
If the darkest hour is before the dawn, Irish property is now showing signs of life. But only in certain areas. Having just returned from Dublin and the western seaboard, it’s evident that any recovery is confined to parts of the capital alone. Country fields are still dotted with half-built bungalows and the shells of unfinished housing estates.
But Ireland’s Central Statistics Office says Dublin house prices have jumped 8 per cent in 12 months and 3.3 per cent during the month of July. Granted, that’s off a very low base, but Ireland’s Residential Property Price Index shows that nationally, residential prices rose 2.3 per cent in the 12 months to July, compared with a fall off 13.6 per cent in the 12 months from July 2011 to 2012. This July, Dublin house prices stood 7.5 per cent higher than a year previously, with Dublin apartments 11.6 per cent higher. Agents report residential rental yields are also strong, at 6 to 8 per cent in prime Dublin 4 and 2 areas.
Only a Dublin story
According to the CSO numbers, this means Dublin house prices are now 52 per cent off their early 2007 peak and apartments 59 per cent. House prices in the rest of Ireland dropped less, about 48 per cent, with prices in the rest of Ireland down 0.1 per cent for the month of July, so it’s really only a Dublin story.