Asking price for homes up twice as fast outside the capital
Published 07/04/2015 | 02:30
Asking prices for houses outside the capital rose twice as fast as those in Dublin over the first three months of the year, according to the country's biggest property website.
Asking prices outside Dublin jumped by 6pc between the start of January and the end of March, Daft's latest house price report found. Dublin, where price growth has outpaced the rest of the country for several years, grew by just 3pc.
Munster experienced its largest three-month increase since 2007. Asking prices in Clare were up 10pc in the three months, while asking prices in Co Waterford rose by 15pc.
Daft economist Ronan Lyons said the trend was due to the Central Bank's new rules on mortgage lending. The rules, which came into effect in February, require buyers to stump up a 20pc deposit - though first-time buyers are required to cough up a smaller deposit of 10pc. They also limit mortgages to no more than 3.5 times a borrower's salary.
"Asking prices in comparison to incomes are very high in Dublin now, so the Central Bank rules are slowing the pace of growth in the capital. It is incredibly unlikely that Dublin will see a return to double-digit price increases. But homes are still very affordable outside of Dublin" said Mr Lyons.
The price hikes also reflect growth in the real economy, he said. Nationally, average asking prices were up by 4.6pc.
"The real economy is improving rapidly. We have a level of economic growth and job creation that most other European countries would envy."
The average national asking price exceeded €200,000 for the first time since 2011, Daft found. But this is still well below the average asking price at the peak of the boom of €375,000.
The growth comes in marked contrast to Daft's last quarterly report, which showed a 1pc decline in asking prices for the last three months of 2014. Mr Lyons said this dip at the end of 2014 was due to uncertainty as politicians and banks cast doubt on the introduction of the mortgage lending caps.
"Now that the lending caps have been finalised, people are happier to close deals again."
The growth also contradicts the Central Statistics Office's (CSO) findings for January and February, which suggested national house prices declined marginally.
However, the CSO does not include properties bought with cash rather than loans in its calculations.
Daft's figures are based on asking prices listed by sellers on its website, not the actual price that properties are sold for.
But the gap between asking and actual transaction prices is closing, the organisation said.
A comparison with the property price register showed Dublin transaction prices were just 3.4pc above asking prices during the three-month period.
In the rest of the country, transaction prices and asking prices were almost equal.