Property now more affordable as house price inflation flatlines across country
House price inflation has flatlined across Ireland with annual asking-price inflation now at less than 1pc.
The ratio between asking prices and average income has declined for the first time since 2012.
The MyHome.ie report, which is published in association with Davy, found that annual asking-price inflation has now slowed to 0.72pc nationwide.
The author of the report, Conall Mac Coille, chief economist at Davy, said that the slowdown in house price inflation was to be welcomed - and was inevitable given stretched affordability.
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While annual inflation outside Dublin grew by €3,200, quarterly inflation actually fell by 0.5pc.
This means the asking price for new sales nationally is €267,000, while the price in Dublin is €374,000.
"Central Bank rules have stopped first-time buyers taking out too much mortgage debt and should lead to more realistic asking prices," Mr Mac Coille said.
"Our analysis shows that the average residential transaction in Ireland (€292,000) is now 6.8 times than the average income of €43,000. This is only slightly below the UK's ratio of seven.
"This is the first time since 2012 that Ireland's house-price-to-income ratio has declined. While there has been a 13pc fall in new instructions to sell and an 11pc drop in the total number of homes listed for sale, there are positives in the market. Mortgage lending to first-time buyers is up 15pc in the first three-quarters and transaction volumes in the €300,000-€400,000 price range are up 7pc in the capital."
Angela Keegan, managing director of MyHome.ie, said it was welcome that clarity was emerging regarding Brexit and Central Bank mortgage lending rules. "For most of the year, we understandably saw prospective purchasers being reluctant to take the plunge due to these two unresolved issues, leading to sluggish house price inflation. The clarity we now have will likely lead to more settled price expectations and a stabilisation of residential transactions in 2020.
"It remains to be seen how the Central Bank's decision to keep mortgage rules unchanged and indeed Brexit will affect the Irish market in the long term, but at least now purchasers can plan without being fearful of sudden shocks."