Property bulletin: Number of homes trading hands falls as prices rise
The number of homes sold in the first half of the year has dropped, despite a sharp increase in the number of new house completions.
An analysis of the Property Price Register (PPR) shows the number of houses and apartments changing hands fell in 17 of the 26 counties, even in areas of high demand including Dublin and the commuter belt, Cork and Galway.
Some 19,251 properties were sold, down 575 or 2.9pc compared with the same period of 2015. The average price paid increased in most parts of the country, by as much as 17pc in some places.
This is despite more than 6,600 new homes being completed between January and June this year, up 18pc on the same period of 2015, which would have been expected to help stabilise prices.
Experts said that the drop in transactions was most likely due to the introduction of tough Central Bank mortgage lending rules in January 2015, coupled with a delay between homes being completed and coming onto the market.
The rules require first-time buyers to secure a deposit of 10pc of the property price, rising to 20pc for those trading up, as well as placing an upper limit on mortgages of 3.5 times household income.
Trinity College Dublin economist and author of the Daft.ie property report, Ronan Lyons, said the rules resulted in many people buying homes who might otherwise have waited.
"It does look like the first half of the year is below, but it looks like being above the first half of 2014," he said. "The last three months of 2014 and first three to six months of 2015 saw a rush [in sales] because of the Central Bank rules. People were worried about the rules coming in.
"When there's a change in the rules, you get these spikes over three or six months which makes comparisons difficult. Compared with 2014, it looks reasonably solid. There's a tendency for some on the selling side to say transactions are down because of the rules, but that's probably a little too excessive."
An analysis of the PPR, which lists the selling price for every property, shows that the number of units changing hands increased in just a minority of counties. The sharpest increase was in Waterford, which rose from 486 transactions in the first half of last year to 561 in the first six months of 2016, an increase of 15.4pc.
Sales also rose in Monaghan (up 5.8pc to 163), Kilkenny (up 5.6pc to 303), Donegal (up 3.6pc to 612), Tipperary (up 3pc to 542), Offaly (up 3pc to 243), Wicklow (up 2.7pc to 580), Kerry (up 1.7pc to 598) and Laois (up 0.4pc to 284).
But transactions fell in all other counties, most notably in Sligo where they dropped to 284, a fall of 14.7pc, but also in areas of high demand including Dublin (down 0.5pc to 6,005), Kildare (down 1.5pc to 945), Cork (down 3.9pc to 2,167) and Galway (down 12pc to 970).
Karl Deeter from Irish Mortgage Brokers said that, while output had increased, it took time for properties to become available for purchase: "You're seeing that building is increasing, but the houses have to make it to market," he said.
"New permits and construction activity doesn't mean an end product. What's happened is you have had years of undersupply. Pent-up demand, especially when it comes to property which is slow to deliver, tends to express itself for a long time."
The analysis also shows that house prices continue to increase, with drops in just three counties, Tipperary, Leitrim and Kildare. The sharpest rise was in Cavan, up 17pc to €105,849, falling to 1.6pc in Sligo, where the average price paid per property was €118,104.
The most expensive 'average' price was in Dublin, up to €378,047, an increase of 8.5pc, followed by Wicklow (€318,786, up 7.8pc), Kildare (€244,354, down 5.9pc) and Meath (up 12.6pc to €222,924). In Galway, the average price rose 9.7pc to €177,915, and by 13.6pc in Cork to €202,934.