House price growth at lowest level in five years
The annual rate of house asking price inflation nationwide has fallen to its lowest level in five years, while in Dublin it has entered negative territory for the first time since 2013, according to the latest house price report from MyHome.ie.
The report, which is published in association with Davy, found that annual asking price inflation has now slowed to 2.4 per cent nationwide, while in Dublin it is down €2,300 year-on-year.
Despite the downward trend in the annual inflation rate, prices are continuing to rise, although at lower rates. The report found that asking prices for newly-listed properties nationally increased by €5,000 in Q2, while they rose by just €2,000 in Dublin. This was the weakest second-quarter gain in the capital since 2012.
Meanwhile, outside of Dublin there was stronger growth, with prices increasing by €7,000 on the quarter, and by just over €10,000 year-on-year.
This means the median asking price for new sales nationally is €276,000, while the price in Dublin is €382,000. 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 that while the price falls may fuel fears of a more damaging downturn, the reason for the price falls this time round were as a result of increased regulation.
“The current slowdown in price inflation is largely due to the Central Bank’s lending rules and stretched affordability. These factors are preventing the latent housing demand from translating into rampant house price inflation fuelled by rising leverage on mortgage loans.
“Ireland’s economy continues to perform well and the property market will continue to be underpinned by high employment and wage growth. While the economy has been driven by strong foreign direct investment, export growth and a slow rebound among indigenous companies, the recovery in homebuilding is still in its infancy,” he said.
Angela Keegan, Managing Director of MyHome.ie, said the fact that we are seeing more transactions, more properties on the market and more sustainable price increases were all positives for prospective buyers.
“The environment for buyers is becoming much more favourable, with 22,600 homes listed for sale in June 2019 on MyHome, up 4.5 per cent on the same period of 2018. The improvement is especially marked in Dublin, with 5,400 homes listed for sale on MyHome – up nine per cent on last year.”