HOUSE PRICES FELL in Dublin last month as the cost increases continued their spread outside the capital.

The average property price across the country was 0.5% higher in May and 13.8% more than in the same time in 2014.

But the annual rate of change had slowed from a few months earlier, when prices in Dublin were racing ahead.

The latest property price index from the CSO, which is based on mortgage-backed sales only, showed a 1.1% increase in the cost of houses outside Dublin, compared to a 0.1% fall in the country’s largest city.

Source: CSO

More cooling

Property experts have said the change was partially being driven by buyers being pushed into the commuter counties around Dublin as they were priced out of the market.

Apartment prices, particularly in the capital, have had the biggest increases, although they remain over 40% below their peaks at the height of the property bubble.

Source: Sam Boal/Photocall Ireland

Savills research director John McCartney said new Central Bank mortgage rules were having the greatest effect in Dublin and there could be “a further cooling off” after September when people with old approvals had all done their deals.

In the longer term, there could be an offsetting pick-up in investor activity as rising rents are making buy-to-let returns look increasingly more attractive than bank deposits,” he said.

Source: CSO

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Property price rises have been outstripping average rent hikes over the past year, but a severe lack of homes available to let is expected to keep driving up rental costs.

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