House prices dip by 0.5% on a monthly basis in November - CSO

Residential property prices nationwide fell by 0.5% in the month of November, according to the latest Central Statistics Office figures.

This was the first monthly fall since February of this year.

On an annual basis, house prices nationally remain 6.5% higher than they were in November last year - the slowest rate of growth since January 2014.

Today's figures show that Dublin property prices decreased by 1.3% on a monthly basis, while they were 3.3% higher on an annual basis.

Dublin house prices fell by 1.2% in the month, while apartment prices dipped by 1.3%.

The price of homes outside of Dublin rose by 0.2% in November from October to mark the ninth month of growth in a row. Prices outside of Dublin are 9.6% higher than this time last year.

The CSO figures are based on mortgage draw-downs only, and do not take into account cash transactions.

Property prices across the country are still 34% below their 2007 peak, but the Central Bank introduced restrictions on mortgage lending in January after a surge in prices in Dublin last year amid a supply shortage.

Commenting on today's figures, Davy economist Conall Mac Coille said that the slowdown in Dublin house prices is not surprising.

"Given that the Central Bank's rules on high loan-to-value mortgages apply only to first-time buyers over €220,000, their impact has been felt most sharply in the capital where affordability is most stretched," the economist noted.

He said the housing recovery outside Dublin began almost one year later, so that affordability is less stretched, and there is probably more room for catch-up.

Mr Mac Coille said that Davys expect residential property prices to rise close to 7% during 2016 despite today's weak figures.

Meanwhile, Goodbody economist Juliet Tennent said the November annual growth rate of 6.5% compares to the rate of 16% seen in the same time last year.

"The rate of increase in house prices has effectively been slowing since the introduction of the macro prudential rules earlier this year. This is further exacerbated by difficult comparatives for Q4 as the end of 2014 saw a surge in activity ahead of the expiration of the capital gains tax waiver," the economist added.

Source : RTE 23/12/2015