Sunday 21 July 2019

New data shows house prices nationwide flatline - with a semi-D now beyond reach for ordinary families

  • House prices are flatlining in Dublin and Ireland's other cities
  • In postcoded Dublin, the price of average three-bed semi showed almost no increase (0.1pc) in the past three months
  • Data released today shows average home in Cork city has also stopped increasing in price
Photo: PA
Photo: PA
Mark Keenan

Mark Keenan

House prices are flatlining in Dublin and Ireland's other cities - with even an average 'semi-D' out of ordinary families' price range.

In large tracts of Dublin, the past three months have seen barely any increase in the price of a typical family home.

That's despite the huge shortage of property in the capital and an estimated 18 months' worth of pent-up demand for accommodation.

Other cities are also flatlining as families cannot afford to reach any higher, with strict limits on mortgages in play.

Workers are now having to travel to the far fringes of the commuter belt in order to get a foot on the property ladder, according to the Irish Independent/Real Estate Alliance (REA) Average House Price Index.

In postcoded Dublin, the price of an average three-bed semi showed almost no increase (0.1pc) in the past three months, with South County Dublin prices exactly the same as three months ago.

North County Dublin is showing an increase of 0.8pc over the quarter.

Over the year, South County Dublin recorded a rise of just 2.4pc with the North County hitting 7.5pc - largely because there are more relatively affordable homes there.

Overall, the price of a semi-detached house in Dublin has increased by just 2.7pc over the year, with the inability of potential buyers to get a mortgage keeping prices down. A semi in the capital now averages €443,333, which is well above the generally accepted maximum borrowing range of up to €320,000 for a dual-income couple with average salaries.

Read More: Desperate house hunters are forced to compromise to put down roots

The data released today shows that the average home in Cork city has also stopped increasing in price at €317,500, the same as it was in June.

Galway city semi-Ds are up 0.9pc over three months with inflation now slowing.

Meanwhile, Limerick city semi-Ds have seen their prices frozen at €200,000, with zero inflation over the previous three months.

In contrast, strong increases in prices were experienced in locations where city commuters are now tending to head in search of affordable homes which are within their mortgage range.

Cork County had some of the strongest increases nationwide in three months with homes up 4.7pc in the quarter while Galway County saw a 3.2pc rise.

Limerick County prices soared by 6.7pc, the second highest in the country and a startling increase of more than 2pc per month.

Commuter locations where mid to low-earning Dubliners are heading to find affordable homes also showed inflationary spikes.

In Laois, a county in which agents are reporting big interest from Dubliners, prices rose by 5.4pc in just three months to €195,000.

This shows that many city dwellers, fearful of surging rents and the insecurities of tenancy, are opting instead for ownership with long-distance commutes attached.

The Real Estate Alliance bases its data on actual sales, as opposed to asking prices, of three-bed semis, the country's most common home type.

"There is no doubt that the Central Bank [mortgage lending] rules are having an effect in the market, and are achieving what they set out to do in terms of keeping a lid on prices," said REA spokesperson Barry McDonald.

Read More: IDA chief denies cost of housing is slowing investment despite 'Ireland is full' warning

"In the Celtic Tiger years, all prices rose across the board, but in 2018 the system is actually working and the only price inflation is in a new homes market that is concentrated in pockets."

There has been a 3pc reduction in cash buyers in the market in the past three months, with mortgage-approved house hunters now making up 78pc of purchasers.

This trend further increases the effect of the Central Bank rules on the market.

"The second-hand market has become extremely price- sensitive, not just in Dublin, and when we look across the country it is the areas with quality housing stock available for under €270,000 that are achieving highest growth," added Mr McDonald.

The average semi-detached house nationally now costs €234,824 - a rise of 1pc on €232,441 three months ago.

A warm summer also played a cooling role in the market, according to Limerick agent Michael O'Connor.

He said: "September appears to be the month when we caught up on lost time.

"Once the kids returned to school, the market accelerated with a noticeable increase in transactions."

The highest rate of increase in the country overall was experienced in Carrigallen in Leitrim.

Leitrim prices were up 7.5pc, making it the fastest-inflating county.

Irish Independent

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