Home prices rise 15.2 percent as the lender hikes rates again

Property prices continue to soar, putting tremendous pressure on those trying to shop in a market that is now showing signs of slowing down.

Nationwide, house prices rose 15.2 percent in the year to March, according to the Central Statistics Office.

Prices rose 12.7 per cent in Dublin and 17.3 per cent outside Dublin.

The recent rate hikes come as ICS Mortgages raised its lending rates again, with a 1 percent increase for three- and five-year fixed rates across all loan-to-value ratios.

Home prices are now just 2 percent lower than the peak they reached during the Celtic tiger bubble era of 2007.

The latest surge is a seven-year high in the rate of increase.

The region outside Dublin where house prices rose the most was the border, at 25.1 percent

At the other end of the scale, home prices in the Middle East rose 15.2 percent.

Outside of the major metropolitan areas, prices are rising as the option to work from home continues to draw people to rural areas.

The nationwide monthly increase was 0.6 percent, below the rate of increase in previous months.

KBC Bank economist Austin Hughes said this could be a “tentative sign” that house price increases are slowing.

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

Mr Hughes said house prices could rise again next month but could then ease off later in the year.

Households paid a median or mean value of €285,000 for a residential property in the year to March.

The lowest median price for a flat 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 percent below its 2007 peak.

Dublin house prices are 10.1 per cent below their February 2007 peak, while house prices in the rest of Ireland are 3.3 per cent below their May 2007 peak.

Overall, prices for new apartments have risen by 84.4 percent since their low point in mid-2013.

Existing home prices are now 121.8 percent higher than their 2012 low.

Meanwhile, ICS Mortgages has announced the second increase in its mortgage.

Three- and five-year fixed rates will increase by 1 percent across all loan-to-value (LTV) ranges starting today. The variable interest rates remain unchanged for the time being.

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

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

It comes just weeks after Avant Money increased some of its fixed interest rates.

The European Central Bank could hike rates as early as July, a move that would hit about 500,000 homeowners with trackers or variable rates.