Dublin house prices stalled last year as tighter mortgage rules dampened inflation. However, price growth has rebounded in the first four months of 2016.

Speaking at a conference this morning, Savills Director of Research John McCartney noted that house price inflation in the capital has almost doubled since the start of the year, rising steadily from 2.6% to 4.6%.

“As we predicted, the mortgage rules have proved to be more a bump in the road than a lasting barrier to house price growth. If you freeze people out of buying their own homes they have to rent. This just inflates rents and attracts investors who drive up prices by competing for properties.”

Looking ahead McCartney said that Dublin price growth will accelerate to 5.5% by mid-year due to continued investor activity and base effects.

“House prices in Dublin actually fell in May and June last year. So even modest growth this summer will lead to a sharp increase in the annual inflation rate.”

In contrast to Dublin, price growth in the regions was robust throughout 2015. However, according to McCartney, this is now beginning to flag;

“Strong price increases outside Dublin last year have made it harder and harder to sustain the same growth rate. In addition, regional markets are suffering from the fact that prices in those locations caught-up somewhat with the larger urban markets in 2015”.