Report shows house prices are rising at a slower pace

The rate of house price inflation has fallen again for the first quarter of the year, according to a new report from MyHome.ie and Davy.

The report shows the rates are now 3.3% nationally and 1.1% in Dublin.

The average price of a new house is now €271,000 outside of Dublin and €380,000 in the capital.

Conall MacCoille from Davy says despite an increase in the supply of houses this year, demand means prices will continue to rise:

Mr MacCoille said: "I think we need to remember here is that employment is still strong, wage growth is around 3-4% at the moment.

"So when you have the lack of supply in the country and also demand is still very strong, we'll think you'll see around a mid-single digit, around 4-5% increase in house prices this year."

He also said, while lending rules from the Central Bank are impacting the market, prices are likely to continue to rise as demand outstrips supply.

Mr MacCoille said: "So the number of people who can borrow more than three-and-a-half times their income id being restrained, that means that really house prices from here should grow in line with wages.

"The capacity for people to take four times, five times, six times their incomes as they did during the Celtic Tiger years just isn't around this times, so we are looking at sedate increases in house prices, not a fall-off, not a rapid increase."

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