Rate of price increase for average house down to 9.1%
The average price of a three-bed semi-detached house rose by 9.1% over the past 12 months, down from an 11.3% rise in 2017, according to a new report.
The Q1 REA Average House Price Index found that commuter counties continued their recent steady growth with a 1.4% increase in Q1, with the average house now selling for €235,900 – a rise of €3,000 in the first three months of the year.
After rising by 12.5% in 2017, the average price in the capital has increased by just €2,000 in the opening quarter and now stands at €440,000 – exactly twice the Central Bank’s €220,000 mortgage deposit threshold.
The average semi-detached house nationally now costs €229,111, the survey has found – a rise of 1.5% on the Q4 2017 figure of €225,806.
The country’s major cities outside Dublin recorded a combined Q1 rise of 2.1%, with an average three-bed semi costing €243,750.
Limerick City saw a 4.2% rise, with prices increasing from €192,000 to €200,000 since December.
Average Q1 selling prices were also 2.9% higher in Galway City, where the typical semi-detached house is now fetching €265,000 and agents REA McGreal Burke reporting strong demand with 10 buyers for every property on the market.
Cork City registered a €5,000 (1.6%) increase in Q1 to bring levels to €315,000, prices remained static in Waterford City at €195,000.
The highest increases were seen in the rest of the country’s towns, which experienced a 2.9% rise in Q1 to an average of €150,050.
The highest annual rate of increase in the country came in Cavan Town where prices rose by €10,000 in Q1 to €150,000 – a change of 33.9% on the March 2017 figure of €112,000.
“Our agent Peter Donohoe reports that prices are being driven by limited supply and competition between owner occupiers and buy-to-let investors in what is a rising rental market in the town,” said REA spokesperson Barry McDonald.
“In Laois, we have seen rises of 6% in the opening quarter based on lack of supply and prices at €175,000 which are attracting the commuter market.
“In commuter counties such as Kildare, the biggest percentage rises are coming in towns such as Newbridge (2.3%) which recorded double the increase of Naas (1.1%) because at €225,000, property is nearer to the Central Bank’s deposit threshold.”
Mr McDonald added: “The Dublin market has become quite price sensitive, even though we are seeing healthy demand and good liquidity with plenty of mortgage lending.
“What we may be seeing, after the rapid increases of recent years, are the Central Bank mortgage lending restrictions imposing an upper level on purchasing power for some buyers.
“There has been a 3% reduction in cash buyers in the market, with mortgage approved house hunters now making up 74% of purchasers, increasing the effect of the Central Bank rules on the market.
“We are seeing strong demand across the board, and homes are reaching sale agreed in just four weeks in Dublin – which is good news for both buyers and vendors.
“Combined prices in Dublin city and county rose by just 0.7% to €408,500, driven by increases in north county areas Skerries (+2.8% €365,000) and Balbriggan (+1.9% €265,000), with prices being seen as more affordable than the city.”
