House prices up outside Dublin but pace slows
House prices outside Dublin continue to rise, in some cases by double digits, but not as fast as expected.
In the second quarter, prices increased by 2.4% nationally compared to this time last year.
However, this is the lowest recorded increase over the last five years.
Co Clare saw a 21.3% jump in the asking price for a three-bed semi-detached home year on year, with counties Westmeath, Longford, and Donegal also seeing double-digit increases.
House prices in Cork City are flat compared to the same time last year at €250,000, but have increased across the county by 5.6% to €245,000.
Limerick is still seeing fast increases in asking prices, surging 22% to €198,000. In Limerick City, prices rose 14% to €200,000.
According to the latest house price report from MyHome.ie, prices in Dublin are now entering negative territory for the first time since 2013.
Inflation here increased by €2,000 compared to €5,000 nationally.
Eleven of the 26 counties have also seen double-digit increases in asking prices for two-bedroom apartments over the past 12 months.
These include: Carlow (21%); Cavan (22%); Donegal (25%); Laois (13%); Leitrim (13%); Limerick (13%); Offaly (17%); Sligo (27%), Tipperary (14%), and Waterford (15%).
While the current slowdown in inflation could fuel fears of a damaging downturn, it is largely due to the Central Bank’s lending rules and stretched affordability, according to Conall MacCoille, author of the myhome.ie report and chief economist at Davy.
“These factors are preventing the latent housing demand from translating into rampant house price inflation fuelled by rising leverage on mortgage loans,” said Mr MacCoille.
While the economy has been driven by foreign direct investment, export growth, and a slow rebound among indigenous companies, the recovery in homebuilding is still in its infancy, he added.
This comes as the daft.ie report shows inflation cooled in all of the main cities during the same timeframe, recorded at 4.4% in Cork compared to an increase of 7% in the preceding year.
The pressure of housing demand is showing up in rents, which went up nationally through 2018, the myhome.ie report finds.
“Notably, rents rose by 7.8% in Dublin despite the presence of rent-pressure zones, which were intended to limit rent increases to 4% per annum,” the report read.
“This must reflect landlords circumventing the rules by fair means or foul.”
