Saturday 21 April 2018

Dublin house prices fall as rest of country surges on

Photo: Bloomberg
Photo: Bloomberg
Mark Keenan

Mark Keenan

Dublin house prices are now falling hard at the same time as regional values surge - the exact opposite experience to one year ago.

The value of an average home in the capital has tumbled over 12 months by 9.3pc in the south county area, by 3pc in the north county, and by almost 6pc in the Dublin City Centre area.

In contrast, areas that experienced the worst price falls have bounced back strongest including Monaghan (up 20pc), Offaly (7.3pc) Kerry (17pc), Donegal (13.8pc), Kilkenny (13.7pc) Cork County (13pc), Wexford (12pc) and Waterford (10.7pc).

The contrasting trends have emerged from the Irish Independent/Real Estate Alliance Average House Price Survey, which shows just how quickly Central Bank lending restrictions in tandem with fast-increasing rents have impacted.

It marks a complete U-turn, as last year Dublin prices had been rising by as much as 20pc while the regions were flagging.

Falling Dublin prices are being blamed largely on the Central Bank's tightened lending regime introduced at the start of this year, impacting harder in the capital where prices are up to twice what they are elsewhere. In tandem, agents are blaming rising rents, which are trapping Dubliners and cutting down their ability to save for vastly increased deposits.

Many are struggling with the 3.5 times income-to-loan ratios.

The average house in Dublin City and County now costs €332,000, down €21,500 (-6.08pc) on last December's price, the Quarter Four REA Average House Price has found.

And while prices in the capital have been hit following large increases in 2014, values in the commuter counties and the larger cities have grown by 4.58pc in the 12-month period, with the average house now costing €206,853.

However, the biggest upsurge this year has been in the rest of the country, where towns have seen growth of 9.31pc, and average prices have risen from €111,518 to €122,161.

Ireland's largest cities have had a strong fourth quarter, with Cork (up 3.64pc), Galway (4.17pc), Limerick (1.29pc) and Waterford (2.84pc) all turning in their best performances since the survey began in 2013.

The average semi-detached house nationally now costs €188,370, a slight rise on the Q3 figure of €186,102.

Prices in Dublin City and County fell by -0.75pc in Q4, while Dublin City alone fell by -0.69pc, the average three-bed semi now costing €357,500. The hardest-falling market in the last three months was in Tallaght in Dublin 24, generally regarded as one of the city's most affordable locations for family homes.

However, the fastest price growth was in the rest of the country outside the commuter belt and larger cities, where house prices increased by 0.95pc in the last three months.

The REA Average House Price Survey concentrates on the sale price of Ireland's typical stock home, the three-bed semi.

But the lack of suitable supply has been a big influence on the property market nationwide, according to REA Chairman Michael O'Connor.

"What we have seen in the past three months are prices only increasing in areas that are offering people the accommodation that they require," he said. "People may want to buy housing, but if suitable properties are not available, they will not buy.

"We are seeing a lack of supply of good quality three-bed semi-detached houses across the country, and a desperate need for new developments.

"In many areas, the properties available in the sub-€220,000 level are either apartments, houses that are too small or need too much investment to bring them up to standard. The market is still stalled at the second-time buyer level, due to the restrictive nature of the Central Bank's deposit lending rules.

"Many potential second-time buyers now only have the option of renting bigger houses and letting out their own, as they are not able to afford the 20pc deposit to be able to purchase.

"There are very few suitable houses to buy at the lower end of the market for first-time buyers because potential second-time buyers have no way to trade upwards."

He pointed out that while Dublin was the first region to recover from the downturn, REA members are now seeing an increase in values in our largest cities outside Dublin a year later.

The cash buyer is still more prevalent in country areas (47pc) than in commuter counties (31pc).

Irish Independent

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