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In the year to January residential property prices in Ireland at a national level increased by 6.3%, indicating that the residential real estate market is recovering.

This compares with an increase of 6.4% in December and a decrease of 3.3% recorded in the 12 months to January 2013, the data from the Central Statistics Office show.

However, residential property prices fell by 0.7% in the month of January. This compares with an increase of 0.3% recorded in December and a decrease of 0.6% recorded in January of last year.

In Dublin residential property prices fell by 1.3% in January but they are 13.6% higher than a year ago. Dublin house prices fell by 1.5% in the month and were 13.2% higher compared to a year earlier while apartment prices were 16.7% higher when compared with the same month of 2013.
 
However, a CSO spokesman said it should be noted that the sub-indices for apartments are based on low volumes of observed transactions and consequently suffer from greater volatility than other series.

The price of residential properties in the rest of Ireland were unchanged in January compared with a decrease of 1.6% in January of last year. Prices were 1.2% higher than in January 2013.

House prices in Dublin are 48.2% lower than at their highest level in early 2007 while apartments in Dublin are 54.6% lower than they were in February 2007.

Residential property prices in Dublin are 49.7% lower than at their highest level in February 2007. The fall in the price of residential properties in the rest of Ireland is somewhat lower at 46.8%. Overall, the national index is 46.7% lower than its highest level in 2007.

According to John McCartney, economist and director of Research at Savills Ireland, the latest CSO house price figures confirm that the Dublin housing market remains strong, but he warned against reading too much into them.

‘The residential market is a classic seasonal business with typical selling peaks in the spring and autumn months. Generally, relatively few houses are sold in January. For example, last year only 5% of the 29,000 housing sales that took place were transacted in January,’ he explained.

He believes that the most important figures, both in terms of the housing market and the general economy, were the Quarterly National Household Survey data.  These show that the strong labor market recovery which has been underway since the first quarter of 2012 continued throughout 2013. In net terms, 60,900 new jobs were added in the economy last year, a net increase of 3.3%, which he said is remarkable by international standards.

Furthermore, McCartney pointed out that data from January shows that this momentum continued into the New Year, with the numbers on the live register falling for the 26th month in succession.

‘All of this will underpin the demand for housing and we expect prices to continue growing in Dublin throughout the year,’ he added.

This article was republished with permission from Property Wire.