herald

Sunday 25 August 2019

Rise and rise of city property prices finally coming to an end

Sherry FitzGerald said house price inflation was flat in Dublin
Sherry FitzGerald said house price inflation was flat in Dublin

Property prices in Dublin have finally stopped rising, a report has found.

It comes as nationwide property price growth has slowed to a fraction of what it was last year.

Prices rose modestly so far this year, with a prediction that low price growth was now set to become a feature of the market. Average prices for second-hand homes here rose 0.3pc in the last three months, estate agency Sherry FitzGerald said.

That represents a slower rate of growth than in the same period last year, when prices increased by 3.2pc. This means price growth was five times less this year than last.

House price inflation since January was 0.6pc, and prices in Dublin were flat.

If Dublin is excluded from the national figures, there was an overall rise of 1.3pc in prices in the year so far, half of what was recorded last year.

Value

Limerick had the highest rise, at 2.2pc in the year to date. Prices in Cork were up 0.8pc, with a rise of 0.7pc in Galway.

Marian Finnegan, chief economist at Sherry FitzGerald, said: "The latest data on house price performance reveals a continued moderation in price inflation, most notably in Dublin.

"The ongoing impact of a restricted mortgage market, due to the tightening of the lending policy introduced towards the end of 2017, has restricted affordability and subsequently price inflation."

Ms Finnegan said this was more notable in higher value locations such as Dublin, Wicklow and the regional centres. "This trend of low price growth is likely to remain a feature of the market," she said.

There was a modest increase in the volume of new house sales in the opening quarter, an analysis of the Property Price Register by the agency shows.

This could be a result of delayed closings due to new building controls and capacity constraints in the industry, Sherry FitzGerald said.

Around 90pc of all new properties sold in the first three months of this year changed hands for less than €500,000.

This points to the success of the help-to-buy scheme in delivering much-needed starter homes into the market, Sherry FitzGerald said.

In total, the value of residential property transacted in the opening quarter of 2019 came to €3.2bn.

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