herald

Sunday 4 December 2016

Dublin sees a slowdown in house prices

Demand: House prices are rising around the country
Demand: House prices are rising around the country

House prices in Dublin are rising a good deal slower than increases elsewhere in Ireland, a new report reveals.

It's the first time in four years that such a trend has been detected.

The average asking price for a house in Ireland grew by 4.6pc in the first three months of 2015, according to a report released yesterday by Ireland's biggest property website, Daft.ie.

This marks a return to price growth, following a 1pc fall in the final three months of 2014.

The author of the report, Dublin academic Ronan Lyons, declared that the new mortgage rules mean that house prices will "only grow as fast as incomes are growing".

"It is incredibly unlikely that Dublin, in particular, will see a return to double-digit price increases," he said.

The average asking price nationwide is now €201,000, the first time since mid-2011 that it has been above €200,000.

This compares with a low of €170,000 in mid-2013 and a high of €378,000 in mid-2007.

Prices in Dublin are now 2.9pc higher than in late 2014, whereas outside Dublin prices rose by 5.9pc in the same three-month period.

The bigger increases in prices outside Dublin were consistent across the country.

In Cork, prices rose by 7.2pc, in Galway they increased by 6.8pc and in Limerick they went up 6.7pc. In Waterford, the increase was 4.9pc while outside the cities the average increase was 5.8pc.

"It is clear the Central Bank rules have had an impact on the market," said Mr Lyons, an assistant professor of economics at Trinity College, Dublin.

"Dublin prices are now anchored to real economic conditions, with survey respondents expecting significantly slower house price growth now than a year ago," he said.

Similarly, compared to a year ago, a far higher proportion of respondents in the survey, in Dublin and elsewhere, said the need to save for a deposit was a key reason for delaying buying a home.

Supply

"The fact that house prices vary across the country by far more than incomes do, means demand should reshuffle from Dublin to elsewhere."

"While this may sound helpful, it does not address the underlying lack of supply in Dublin, which needs to be addressed as a matter of priority," he said.

aokeeffe@herald.ie

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