Home prices up 15.2% as lender raises rates again

REAL ESTATE prices continue to soar, putting enormous pressure on those trying to buy in a market that is now showing signs of slowing down.

According to the Central Statistics Office, the booming property market saw prices rise 15.2% nationwide in the year to March.

In Dublin, prices increased by 12.7% and prices outside Dublin by 17.3%.

The latest price increases come as ICS Mortgages raised its lending rates again, with a 1% hike for three- and five-year fixed rates on all securities loans.

Property prices are now just 2% below their peak during the Celtic Tiger Bubble era in 2007.

The latest increase is seven years high in the rate of increase.

The area outside of Dublin that saw the biggest rise in house prices was the border at 25.1%

At the other end of the scale, house prices in the Middle East increased by 15.2%.

Prices are rising outside major urban centers as the work-from-home option continues to draw people to rural areas.

The national monthly increase was 0.6pc, down from the rate of increase in previous months.

KBC Bank economist Austin Hughes said it could be a “tentative sign” that the rate of house price increases is slowing.

He said interest rate hikes announced by some lenders, with indications that European interest rates could rise as early as July could dampen some of the market heat.

Mr Hughes said property prices could pick up next month but then could start falling later in the year.

Households paid a median or median price of €285,000 for a residential property in the year ending March.

The lowest median price paid for accommodation was €136,500 in Longford, while the highest was €601,000 in Dún Laoghaire-Rathdown, the CSO said.

Overall, the national index is 2.1% lower than its 2007 high.

Residential property prices in Dublin are 10.1% below their peak in February 2007, while residential property prices in the rest of Ireland are 3.3% below their peak in May 2007.

Overall, new home prices are up 84.4% from their mid-2013 low.

Existing home prices are now 121.8% above their 2012 low.

Meanwhile, ICS Mortgages announced its second mortgage hike.

Its three- and five-year fixed rates will increase by 1% on all loan-to-value (LTV) tranches starting today. Variable rates will remain unchanged for the time being.

It comes just two months after raising its three- and five-year rates.

The three-year rate for those with a 90pc loan will rise to 3.55pc, with 3.69pc the new five-year rate for those with the same LTV.

This comes just weeks after Avant Money raised some of its fixed rates.

The European Central Bank could raise rates as early as July, a move that would affect some 500,000 homeowners with trackers or variable rates.

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