herald

Thursday 8 December 2016

Drop in city house prices to continue into 2016

For sale signs
For sale signs

The Dublin housing market has steadied and house prices have dropped by 0.1pc for the first time in three years, according to a new survey.

The number of houses for sale in the capital this year is up 45pc, with 5,200 properties available.

The average asking price of a house in Dublin is now €312,000.

Trend

Conall MacCoille, chief economist at Davy, who carried out the report for MyHome.ie, said he expected the trend to continue into the new year, but doesn't think it will last indefinitely.

Positivity comes from the fact that house prices have dropped marginally and this trend signifies a steadying of the market.

MacCoille said he believed this trend will be helped in the new year by several factors.

"Wage growth coupled with tax cuts in Budget 2016 will help to support house price inflation," MacCoille said.

Experts have said that the current rate of inflation should slow to 5pc by December, after last summer's high of 20pc.

Central Bank lending rules, high rental inflation and the touted 'giveaway' budget have been credited for the predicted slow of inflation in house prices.

"The Central Bank's new lending rules have prevented first time buyers in Dublin from taking out ever-higher mortgages," Mr MacCoille said.

"The over 20pc rates of inflation of the summer of 2014 were simply not sustainable - and this is a positive."

Figures previously released by the National Housing Construction Index found a decrease in planning applications for new builds in Dublin, with residential planning application numbers dropping by 5pc in the first six months of 2015.

There have been 6,745 housing completions so far this year while the number of houses required nationally is estimated to be 25,000.

Angela Keegan, managing director of MyHome.ie, said the Government needed to address the lack of supply of new homes in the city - despite the fall in prices.

Planning

"The low level of new builds needs to be addressed by government through initiatives on planning, the freeing-up of development land and the removal of inappropriate levies and charges on residential developments," she said.

Ms Keegan said that increasing rent inflation highlighted the need to address "the supply side of the equation".

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