Property experts in Ireland are crossing their fingers that the country’s dismal property market has finally bottomed out after several years in the doldrums.
Hopes of a recovery are on the increase after news of property price gains in Dublin.
Ireland’s Central Statistics Office (CSO) says that house prices in the capital rose by 2.1% in the past year.
In January alone, prices are reported to have increased by 0.5%.
However, property prices in the rest of the country continued to plummet, although the rate of decline is slowing.
Now, many property analysts believe that Ireland’s property market will fall in line with Dublin and see modest price increases this year.
Five year slump
The property slump in Ireland has been running for five years with prices in Dublin falling by 54% against their 2007 highs.
Apartments in the city have fallen by 61% in the same period and they are still continuing to struggle since they fell by 4.6% last year.
Residential property prices in the rest of Ireland have fallen by an average of 47% and the national index average is 50% lower than the 2007 peak says Property International
However, it may take some time for properties outside of Dublin to catch up since the CSO figures reveal that prices fell by 7% cent last year and 1.6% in January alone.
The rate of decline in Ireland’s property prices is now the lowest since May 2008 and a number of sales are also increasing which, experts say, indicates that a potential recovery may be under way.
Buyers are being helped by low interest rates and it looks as though rents are also stabilising.
It’s not all good news for the country’s property market since unemployment is rocketing and there is an oversupply of property on the market.
Capital gains tax
The house price bubble which appeared in Ireland was one of the longest and biggest booms seen in Europe.
Prices for established homes rocketed by an incredible 330% between 1996 and 2006 while the prices for new homes increased by 250%.
Michael Noonan, the country’s Finance Minister, said: “There are manifest signs that the country is emerging from the worst of the crisis and that the efforts of the Irish people, despite the hardship, are leading to success.”
In recent years, the Irish government has made determined efforts to stimulate its property market with a range of measures which included exempting profits made on houses bought between December 2011 and December 2013 from capital gains tax.
First-time buyers can also enjoy 30% mortgage interest relief though this is due to end in 2018.
