Slowdown in house price inflation recorded
New research from the Real Estate Alliance (REA) shows a slowdown in house prices across the country.
The price of a three-bed semi-detached house in Dublin has risen by just 2.7% in the last 12 months, while prices in other cities have also flatlined as families cannot afford to reach any higher.
REA Estate Agent spokesperson Barry McDonald says the Central Bank rules on mortgage lending appear to be having an effect on the market.
“There is no doubt that the Central Bank rules are having an effect in the market, and are achieving what they set out to do in terms of keeping a lid on prices,” he said.
“In the Celtic Tiger years, all prices rose across the board, but in 2018 the system is actually working and the only price inflation is in a new homes market that is concentrated in pockets.
“The second-hand market has become extremely price sensitive, not just in Dublin, and when we look across the country it is the areas with quality housing stock available for under €270,000 that are achieving highest growth.
“The effect of the Central Bank’s borrowing rule on price ceilings is brought sharply into focus by a drop-off in viewings for four-bedroomed housing in certain areas where they are priced over €400,000, for example.
“Many agents are attributing the lack of transaction to the fine weather in the summer, and report an upswing in activity in September.
“However, there is a defined slowdown in the annual rate of house price inflation as measured in our survey, which is the most reliable indicator of a stable market.”
The cost of a home across the country rose by 5.8% over the past 12 months, a drop on the 8% recorded to June.
In North Dublin, the price of a second-hand semi-detached house has risen by 7.5% in the past year.
That is in stark contrast to South Dublin, where prices have risen by just 2.4% since last September.
"The increase in value of a three-bed semi so far this year in the city is approximately €5,300, bringing the average up to €443,000," said McDonald.
"Really, when you look at that across the other cities, Cork, Galway, Waterford, etc., it's similarly reflected - maybe not quite as dramatic as we've seen in Dublin."
Both Waterford (+2.5% €205,000) and Galway (+0.9% €275,000) recorded increases, with agents in both locations citing strong demand but a shortage of suitable properties.
Limerick city (€200,000) returned its first static figure in a number of years, and Cork city also registered 0% growth in the quarter with the time taken to sell now running at nine weeks.
The highest increases were seen in the rest of the country’s towns, which experienced a 2.1% rise in Q3 to an average of €156,383 – up €3,000 in 12 weeks.
