Asking prices fell by 2.5% in Dublin in the third quarter of 2018 and by a more modest 0.8% nationally, according to the latest residential property price report.
The data from the MyHome.ie index, published in association with Davy, also shows that year on year asking prices increased nationwide by 5.9% but by just 2.2% in Dublin, the slowest pace of increase in two years.
The median asking price for new sales nationally was €268,000, down €2,000 from the second quarter of the year. In Dublin it was €375,000, down €9,000.
According to Conall MacCoille, chief economist at Davy, asking price growth has slowed as expectations for future growth have been reined in. ‘The double digit price inflation we experienced earlier this year was simply not sustainable and the slowdown we predicted earlier this year has now materialised,’ he said.
‘While the magnitude of the drop this quarter may be surprising, some of the quarterly decline may be seasonal, reflecting typically weaker prices at the end of a busy summer trading season,’ he explained.
‘Some also may be temporary as it was always likely that house price inflation in Dublin would slow following the tightening of the Central Bank mortgage lending rules. These rules were aimed at preventing buyers reacting to stretched affordability by over borrowing, and they have been successful in this regard,’ he added.
An analysis of the MyHome data indicates that the slowdown is still concentrated in the most expensive property types and locations. For example, the median asking price for one bedroom apartments was up 11% in the year to the third quarter of 2018 to €200,000. In contrast median prices for four bedroom detached homes were flat at €650,000.
‘With jobs and wages growth both exceeding 3%, underlying demand remains exceptionally strong and we expect inflation to equal 8% by December. Brexit of course remains something of a wild card but the key assumption here is that the UK will move to the transition period in March next year, maintaining the status-quo by effectively remaining inside the single market,’ MacCoille concluded.
The report also highlighted a pick-up in home building activity. In the 12 months to June 2018 completions equalled 16,300, already well ahead of the 14,446 recorded in 2017. In total planning permissions for 26,750 units have been granted in the 12 months to June.
Angela Keegan, managing director of MyHome, believes that the increase in home building was beginning to feed through to improved stock levels, particularly in Dublin.
There were 22,658 properties listed for sale on MyHome in September, up 6% on last year. This is the second consecutive quarter in which the stock listed for sale has increased, breaking the downward trend over the past six years. The improvement was higher in Dublin with 5,000 properties listed for sale, up 18% on last year.
The Property Price Register indicates that 34,706 properties have been sold so far this year and MyHome estimates that this represents a 6% growth in transaction volumes, although the register is not yet fully up to date. ‘We believe the total figure of transactions for the year will be close to 60,000, which would be an increase of around 9%,’ said Keegan.
The average time to sale agreed continued to decline 3.5 months nationally, down from 3.8 months previously. In Dublin it was steady at 2.9. Keegan said that this is consistent with higher transaction levels rather than a result of any slowdown in the housing market.
