House price rises show signs of slowdown but supply still an issue
New housing estates are being built despite the growing need for urban apartments, says author of latest property price report
The national shortage of available homes on the market is still at crisis level - but the rate at which house prices are increasing is finally showing signs of easing.
House prices nationally rose by 2.7pc during the second quarter of 2018, according to the latest House Price Report released by Ireland's largest property website, Daft.ie.
The average price nationwide during the second quarter was €254,000, 5.6pc higher than a year ago.
This shows the annual rate of increase in list prices in the second quarter of this year is at its lowest level since early 2014.
Compared to their lowest point in 2013, prices nationwide have risen by an average of 54pc or just over €89,000.
In Dublin, prices rose by 1.8pc between March and June, meaning the average price in the capital is now almost €155,000 higher than five years previously.
The average price of houses on sale in Dublin between March and June this year was €374,885.
Across each of the other major cities, prices rose substantially in the last three months - by 4.8pc each in Limerick and Waterford cities, and by 4.7pc in Cork and 4.3pc in Galway.
Outside the main cities, prices rose by 3.2pc in the same period, with the largest increases in Connacht-Ulster and the smallest in Munster.
The number of properties available to buy on the market nationwide has risen in recent months.
In Dublin, almost 4,800 properties were available to buy in June, up close to 50pc on the number a year earlier.
Outside the capital, there were almost 19,000 homes on the market in June - 2pc below a year previously but up 2,000 on the March level.
In Dublin, the fraction of properties finding a buyer within two months is down (37pc against 50pc a year ago), while the fraction selling within four months remains high (72pc).
Elsewhere, 65pc of properties listed currently find a buyer within four months, in line with the figure from a year ago (66pc).
Commenting on the figures, Ronan Lyons, economist at Trinity College Dublin and author of the Daft.ie Report, said: "Ireland's sales market for housing remains one of strong demand and relatively weak supply.
"That said, there are signs - in particular from the Dublin market - that new supply is having an effect, with increased availability on the market and a slowdown in inflation.
"While the increase in new homes built is welcome, it is predominantly in the form of housing estates.
"Almost all the new homes needed in the country are urban apartments, so the mix of supply remains a challenge for policymakers."
Martin Clancy from Daft.ie said: "Interest in the property market remains extremely strong. We're now seeing over 1,000 property searches taking place every minute on Daft.ie."
The average price of homes and the year-on-year change in the major cities between April and June inclusive are indicative of the current trends:
Dublin city: €374,885 - up 6.2pc.
Cork city: €273,894 - up 6.9pc.
Galway city: €285,277 - up 6.2pc.
Limerick city: €189,416 - up 6.9pc.
Waterford city: €172,880 - up 8.8pc.
Last month, there were predictions that house prices will not reach a plateau for another three years when efforts to significantly increase the supply of new homes would begin to kick in for hopeful buyers.
Dr Kieran McQuinn, research professor at the Economic and Social Research Institute, said that if strong price rises continued at their current rate, there is a possibility of a 'bubble' in the market.
He said it appeared that prudential rules in the Irish market were helping to contribute towards a steadying effect on prices.
A minimum of around 35,000 new homes are believed to be needed in Ireland each year until 2023.
The trend in supply of new homes has been moving upwards significantly but the shortage of new housing remains at crisis levels.
The very cheapest average asking prices for the smallest homes, between April and June, were in Co Roscommon, where the price tags on one-bedroom apartments were just €46,000.
In the same county, the average asking price for a five-bedroomed detached home was just €177,000.
In stark contrast, average property prices listed on Daft.ie in Dublin 6 were at the other end of the spectrum.
In that affluent suburb in the capital, the average asking price of a one-bedroom apartment was €342,000, while the average asking price of a five-bedroom detached house in the upmarket Dublin district was €1,163,000.
Sentiment is at a new low in Ireland when it comes to how people feel about value for money in the housing market at present.
The percentage of respondents who believe that prices represent good value fell to 24pc nationwide last month, the lowest on record.
In the capital, just one in six people surveyed said they could see value in the housing market. Some 1,000 participants in the marketplace were asked their opinions.
This was the eighth quarter in a row when 15pc or fewer said they could see value in the market for homes in Dublin.