Housing price falls in January biggest in three years
Central Bank's lending restrictions said to be slowing down the market
PROPERTY prices suffered their biggest monthly fall in three years in January, as the rapid increases of last year came to a halt.
Residential property prices fell by 1.4pc nationwide, the Central Statistics Office said.
Economists said that January was traditionally a slow month for property sales, but the figures for the past few months were also showing evidence of a slower pace of price rises.
A number of commentators have attributed the slowdown to new Central Bank mortgage lending limits.
However, many buyers will have got mortgage approval before the lending clampdown.
This approval will generally last for six months, until this summer, so it may be too early to fully assess their impact.
Economists also said there may have been a rush to buy by investors before the end of last year, before tax breaks ended.
Meanwhile, there were signs of more properties for sale, with more people coming out of negative equity, economist with Goodbody Stockbrokers Dermot O'Leary said.
And more investors were selling up, forced by banks to clear their arrears, he said.
The average sale price of a property nationwide is now €205,000, calculations by Goodbody Stockbrokers show. That is up €28,000 year-on-year.
In Dublin, the average price is up €49,000 to €276,000, while outside the capital prices are up €14,000 in a year to €165,000 on average.
However, the drop in prices last month in Dublin, where values fell by 2.1pc, suggest that the Central Bank's new mortgage lending restrictions are having an impact on the property market.
Economist with Merrion Stockbrokers Alan McQuaid said the tighter lending conditions imposed by the Central Bank may already be slowing the market - but it was too early to say for certain.
Mr McQuaid said the latest planning permissions data showed a sharp rise in the third quarter, indicating that housing supply may also be starting to improve.
"This should help to reduce the increase in house prices over time," he said.
Property Industry Ireland, the Ibec group that represents businesses in the property sector, said that it believes the fall in prices nationally in January shows that Central Bank lending restrictions are already having an effect.
Director Peter Stafford said: "The figures follow the trend seen in recent years of a fall in property prices in January."
MyHome.ie also said the price falls recorded in the latest CSO figures may be linked to the Central Bank rules.
Managing director Angela Keegan said the market was in a state of flux due to the new lending rules.
The property price fall in January was the largest in national prices in a single month since February 2012.
Outside Dublin, residential property prices fell by 0.9pc in January.
Despite this fall, residential property prices across the country are up an average 15.5pc over the past 12 months.
The capital's residential property prices are still 21.6pc higher than a year ago - even though Dublin house prices fell by 2.1pc in January, while apartment prices increased by 0.9pc.