Collapse in the pace of house price growth in capital
Property price increases are now dramatically bigger outside the capital than in Dublin but nationally a lack of new building means housing supply is at a nine-year low.
The pace of house price growth in Dublin has collapsed from a rate of almost 25pc in mid-2014 to an annual rate of less than 3pc at the end of last year, according to property website Daft’s latest national survey of asking prices.
Beyond the capital, property prices accelerated over the same period, with the pace of growth rising from 2pc to 13pc.
Limerick city has seen some of the most extreme volatility over the past 12 months. Price falls in 2014 gave way to a 22pc hike last year, to take the average asking price to €145,244, according to Daft.
In south Dublin, the trend was completely reversed, and what had been a rapidly rising market in 2014 is now in retreat. Asking prices for houses fell in six of the three main Dublin regions between September and December, including the biggest fall of 1.1pc in the traditionally largely well-heeled South County Dublin district, according to Daft.
The average asking price of €514,845 in South County Dublin is the highest anywhere in the county, but is barely changed from a year ago, according to the Daft report.
Longford has the cheapest homes in the country, with an average asking price of just €98,000, even after double-digit growth last year.
While Daft mainly tracks asking prices on its website, the latest data shows actual prices in the capital – so-called transaction prices – are now more or less in line with what vendors are seeking.
There were just over 12,000 sales of houses and apartments recorded in the final three months of 2015 and in most parts of the country, including Dublin, the ultimate sale price was within 1pc of the asking price. That’s a shift from 2014 when houses were changing hands at 4.4pc above the asking price.
Across the country, there were just 25,000 homes available for sale at the start of December, the lowest level since 2007, including 4,000 in Dublin.
Daft economist Ronan Lyons said housing shortages remained a problem, but the outlook for the housing market was healthier than it was for 2014.
The Central Bank’s limits on mortgage lending, introduced last year, meant prices could not spiral out of control as they did during the boom, he said.
There was also a growing consensus that the cost of building needed to be reduced, he said. That includes looking at issues such as minimum sizes.
A land tax to encourage more efficient use of sites, which would penalise owners of derelict and vacant properties, should also be introduced, he said.