Asking price growth fall across Ireland, down to 1.1% year on year in Dublin

Asking prices in Ireland are continuing to moderate with annual growth of 3.3% in the first quarter of 2019 nationally, but down to just 1% in Dublin, the latest index data shows.

The property report from MyHome points out that the slowdown was noticeable in the second half of 2018 and has continued into the first quarter of this year and it is particularly concentrated in the most expensive properties in Dublin.

The national annual growth of 3.3% is down from 6% in the fourth quarter of 2018 and the 1.1% rise in Dublin is down from 3% in the same period last year.

Despite the downward trend in the annual rate, prices are continuing to rise, albeit at a slower rate. The report found that asking prices for newly listed properties nationally increased by 2% in the first quarter and by 1.4% in Dublin.

This means the median asking price for new sales nationally is €271,000, up €5,000 from the last quarter while the price in Dublin is €380,000, also up €5,000. Newly listed properties are seen as the most reliable indicator of future price movements.

The author of the report, Conall MacCoille, chief economist at Davy, said the slowdown in price inflation, which was concentrated in Dublin, was largely due to the Central Bank’s lending rules and unrealistic price expectations rather than uncertainties caused by Brexit.

‘At the beginning of 2018, the median loan to income ratio among first time buyers in the capital was already 3.5 times income and therefore close to the regulatory threshold. The tightening of the Central Bank of Ireland mortgage lending rules, and the resulting slowdown in price inflation, was always going to be felt first in the capital. It also appears that price expectations in early 2018 were unrealistic and a period of adjustment has taken place as a result,’ he explained.

He pointed out that the analysis shows that the slowdown has been concentrated in the most expensive property types and areas. For example, the median asking price for four bedroom detached houses in Dublin is flat on the year at €650,000. However, prices for one bedroom apartments are up 10.5% on the year to €210,000, while the price of two bedroom apartments are up over 8% across Dublin.

‘Despite the current slowdown, we still expect Irish house prices nationally to rise by 4% in 2019,’ he said, explaining that there have been discussions about the possibility that Brexit uncertainties have held back prices but there are few signs yet that Brexit is holding back transactional activity. ‘Residential transactions grew by 4% in 2018 to 57,000 and we believe volumes in January and February were also up 4% on the same period last year’ he added.

Angela Keegan, managing director of MyHome.ie, believes that the fact that there are more transactions, more properties on the market and lower price increases means that there are positives for prospective buyers.

Indeed, there were 21,250 properties listed for sale in March, up 13% on last year. The improvement has been particularly marked in Dublin, where 5,200 properties were listed for sale, up 35% on the 3,900 recorded this time last year and Keegan said that the increase in stock may very well be a contributing to the lower rate of price inflation in the capital.

She also pointed out that with 18,100 units completed in 2018, it is clear that new construction is starting to add to supply. There are currently 509 new housing developments listed on MyHome.

According to the report the average time to sale agreed nationally has risen to 4.8 months and to 3.9 months in Dublin.