Lending limits force house sellers to drop expectations
Published 07/07/2015 | 02:30
The pace of property price rises in Dublin has slowed down, but outside the capital prices are increasing at a stronger rate.
The new figures show rules limiting lending imposed by the Central Bank on banks are tempering price rises in the capital.
The Daft.ie survey looks at asking prices and shows that those selling in the capital have pulled back on what they are seeking.
Prices in Dublin rose by less than 1pc between March and June.
This compared with a rise of 4.4pc in Cork over the same period, and a rose of 5pc in Limerick.
Galway saw price rises by almost 4pc in the March to June period, while in Waterford there was a 3.4pc increase in asking prices.
Outside the major cities there was a rise of 2.8pc in prices, according to the Daft.ie survey.
For the country as a whole, the average asking price for a house in Ireland grew by 1.9pc in the second quarter of 2015.
The study of asking prices comes a day after the Irish Independent/Real Estate Alliance Average House Price Survey showed that actual sale prices in Dublin dipped by as much as 7pc since the start of the year.
Daft.ie economist Ronan Lyons said the pace of growth had slowed from an average of 5pc to less than 2pc.
Across the country the average asking price in the three months to June is €202,00, up from €164,000 in the middle of 2013.
But this is well below the peak asking price of €370,000 back in 2007.
Dr Lyons said: "The second quarter of 2015 saw the last of those buying under the old mortgage rules and already the Central Bank regulations about borrowing are having a clear impact, not only on overall house price growth, but also on the spread of house prices."
He said that in each of the five most expensive markets in the country - Dublin 4, Dublin 6, Dublin 6W, Dublin 14 and South County Dublin - average prices currently are more or less unchanged from September 2014, when the Central Bank announced it would be capping mortgages.
"On the other hand, prices in Dublin's commuter counties have risen by more than 10pc in the same nine-month period."
He said a reshuffling of demand from Dublin to elsewhere in the country may help general economic activity outside the capital.
"Ultimately, however, it does nothing to address the growing supply shortages faced by Dublin's growing population," the Trinity College-based economist said.
In Dublin city centre, asking prices have gone up 12pc in the past year to €249,000.
The average asking price in Cork city is now €210,966, up 19pc in the past year.