House prices soar in commuter belt but flatline in the capital
HOUSE prices in the outer commuter counties have soared as people priced out of the Dublin market are being pushed farther afield in search of affordable homes.
The latest Irish Independent/ Real Estate Alliance Average House Price Index published today shows that prices in Co Laois have shot up 6.1pc since the start of the year, while prices in Co Cavan have surged by 6.7pc.
Meanwhile, strict lending controls introduced by the Central Bank are being cited as the reason for a near flatline in prices of three-bed semis in Dublin since the beginning of the year.
Aside from north Co Dublin, where affordable homes are still available in some numbers, Dublin prices have remained almost unchanged as potential buyers fell foul of lending controls.
The price of the average home in south Co Dublin has remained entirely static since Christmas, while values in Dublin’s postcode suburbs increased by just a half of 1pc in the same period.
In contrast, in the same period last year, prices in Dublin’s postcode suburbs shot up almost 10 times faster – by 4.5pc.
Meanwhile, prices in north Co Dublin, where more affordable homes are still available, continued to range upward, but by just 2.4pc since the start of the year.
After rising by 12.5pc in 2017, the average price for a semi in postcoded addresses in the capital has increased by just €2,000 in the opening quarter of 2018 and now stands at €440,000 – almost twice the price of an average semi nationwide.
The average semi-detached house nationally now costs €229,111, a rise of 1.5pc on December’s figure of €225,806.
The Irish Independent/REA Average House Price survey focuses on real sale prices achieved – rather than asking prices – for the country’s most common family home type, the three-bed semi. Overall, the average house price across the country rose by 9.1pc over the past 12 months – indicating that the market is steadying after the 11.3pc overall rise in 2017.
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It also suggests that the Central Bank lending controls are keeping a lid on the Dublin market, despite tight levels of supply.
While most REA agents in the capital reported that prices in Dublin’s postcode areas have been static in the first three months of the year, the only notable rises were in more affordable areas such as Dublin 24 (up 2pc to €260,000) and Balbriggan (up 1.9pc to €265,000).
REA describes the situation in the capital as “buyers reaching for the last of the low-hanging fruit” in terms of family homes for which they can qualify for mortgages.
Conversely, some of the biggest price increases nationally have been recorded in Laois and Cavan, which are now experiencing a surge of pricedout Dubliners looking to buy affordable semis.
Laois has seen values shoot up by 6.1pc since December while Cavan has seen prices surge by 6.7pc.
Prices in Laois, where an average semi now costs €175,000, have increased by 25pc in the past 12 months and in Cavan, where a semi costs just €120,000, prices have surged by 21.8pc since this time last year.
The highest increase in the country came in Cavan town where prices have risen by €10,000, or 12pc, in the past three months.
Dublin-based buyers who are being curtailed by mortgage borrowing limits are also finding prices in adjoining commuter counties harder to afford.
The average three-bed semi in Meath, Kildare, Wicklow and Louth, now cost €241,250, €266,500, €274,393 and €202,500 respectively.
Prices in all but Co Louth are now well over the national average.
Together, Dublin’s immediately adjoining commuter counties continued their recent steady growth with a 1.4pc increase in the first quarter of this year, with the average house now selling for €235,900 – a rise of €3,000.
“The Dublin market has become quite price sensitive, even though we are seeing healthy demand and good liquidity with plenty of mortgage lending,” said REA spokesperson Barry McDonald. “What we may be seeing, after the rapid increases of recent years, are the Central Bank mortgage lending restrictions imposing an upper level on purchasing power for some buyers.
“There has been a 3pc reduction in cash buyers in the market, with mortgage-approved house hunters now making up 74pc of purchasers, increasing the effect of the Central Bank rules on the market.
“We are seeing strong demand across the board, and homes are reaching sale agreed in just four weeks in Dublin – which is good news for both buyers and vendors,” he added.
In Limerick city, prices for an average three-bed semi rose by 4.2pc since December, while in Galway city they were 2.9pc higher.
Cork city saw prices rise by 1.6pc in the first quarter of the year, while prices remained static in Waterford city.
The cost of an average semi in the major cities, excluding Dublin, now stands at €243,750.