Saturday 24 August 2019

Property price growth continuing to cool nationally

(PA)
(PA)
The slowdown is largely due to the central bank’s lending rules. Stock photo: PA

Michelle Devane

Property price growth has slowed nationally with Dublin showing the most significant cooling off, new figures confirm.

The latest report from MyHome.ie found that annual asking price inflation fell to 2.4pc nationally in the second quarter of the year - the lowest level it has been in five years.

In Dublin, that figure entered negative territory for the first time since 2013. It is down to -0.6pc.

Despite the downward trend in the annual inflation rate, the report, which is published in association with Davy, found asking prices are continuing to rise.

Asking prices nationally rose by 2.1pc in the second quarter of this year compared with the previous quarter.

In Dublin, prices rose by 0.5pc in the same period, the weakest second-quarter gain since 2012.

Overall, the median asking price for new sales nationally was €276,000, while in Dublin it was €382,000.

Newly listed properties are seen as the most reliable indicator of future price movements.

The author of the report, Conall MacCoille, chief economist at Davy, said that while the price falls may fuel fears of a more damaging downturn, the reason for the price falls this time around were a result of increased regulation.

The Central Bank of Ireland tightened its mortgage lending rules last year.

"The current slowdown in price inflation is largely due to the Central Bank's lending rules and stretched affordability," he said.

"These factors are preventing the latent housing demand from translating into rampant house price inflation fuelled by rising leverage on mortgage loans.

"Ireland's economy continues to perform well and the property market will continue to be underpinned by high employment and wage growth.

"While the economy has been driven by strong foreign direct investment, export growth and a slow rebound among indigenous companies, the recovery in home building is still in its infancy."

Irish Independent

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