House price inflation accelerates to almost 8%

House price inflation has accelerated to almost 8 per cent despite the affordability pressures on buyers.

The latest residential property price index from the Central Statistics Office (CSO) indicates that prices rose at an average rate of 7.9 per cent in the 12 months to April this year, up from a rate of 7.4 per cent the previous month.

In Dublin, values rose at an annual rate of 8.3 per cent in April, while prices outside Dublin were 7.6 per cent higher compared with a year earlier.

April was the eighth consecutive month to see an increase in headline inflation in the State’s property market.

It comes ahead of anticipated interest rate reductions across Europe. The European Central Bank (ECB) reduced interest rates by 0.25 per cent earlier this month and is expected to cut borrowing costs at least once more this year.

With supply pressures remaining and interest rates expected to start coming down, demand appears to be driving prices forward again.

Demand is also being aided by various Government incentive programmes, including the Help to Buy and the First Home schemes, which have fuelled activity among first-time buyers.

The latest CSO numbers indicate there were 3,572 dwelling purchases by households at market prices filed with Revenue in April worth approximately €1.4 billion. This represented a 9.5 per cent increase on the same month last year.

The figures suggest prices rose by 0.4 per cent month-on-month in April after 0.5 per cent increases in March and February respectively.

The CSO said households paid a median or midpoint price of €335,000 for a residential property in the 12 months to April.

The lowest median price paid for a dwelling was €169,000 in Longford, while the highest was €624,999 in Dún Laoghaire-Rathdown.