The rate of house price inflation has halved in the past three months as home-buyers become more cautious amid rising living costs, a new survey has found.
The actual selling price of a three-bedroom semi-detached house across the country rose by 1.4 per cent over the past three months to €290,630 – an annual increase of 10 per cent, according to the latest Real Estate Alliance (REA) average house price index.
REA said this is a marked slowdown on the 2.9 per cent quarterly increase recorded in the preceding three months, “signalling a cooling of the frenetic demand in the marketplace”.
The third quarter index also found that A-rated homes are fetching 12 per cent more than C-rated properties.
The gap rises to 16 per cent in the capital as running costs become more important to home-buyers.
The time taken to reach “sale agreed” rose from four weeks to five weeks as REA agents nationwide reported a “less frenzied” approach to viewing and buying.
While the actual average selling price of three-bedroom homes in Dublin city is about to breach the €500,000 mark, the 0.8 per cent quarterly rise to €497,500 is half that experienced in the previous three months.
REA spokesman Barry McDonald said: “We have seen a definite slowdown in demand levels and the urgency that we were seeing with buyers has reduced.
“The traditional summer lull returned for the first time in a few years and there were no signs of the market heating up again in September, which is good news for buyers.”
He went on: “Interest rate rises and cost-of-living inflation are definitely affecting sentiment, with viewers patiently waiting for the right property.
“There is still a massive shortage of housing, but Dublin agents REA Grimes are reporting an increase in supply and a wider choice of properties coming to market, leading to a longer sale time.
“The energy rating of a house is becoming a main talking point, with buyers increasingly taking the cost of heating or increasing the energy rating of older homes into account.”
First-time buyers accounted for almost 60 per cent of all purchasers in the third quarter of this year, according to REA, a figure which rose to 76 per cent in Dublin.