Sunday 20 October 2019

Revealed: House prices in Dublin falling by €1,000 a month

Sale price of average three-bed semi in the capital drops to €433,000 as cash buyers dry up

Stock: PA
Stock: PA
Mark Keenan

Mark Keenan

Average houses in Dublin are losing value at a rate of more than €1,000 per month, while prices elsewhere in Ireland continue to rise slowly or remain static, data exclusive to the Irish Independent reveals.

Second-hand property prices in the capital decreased by an average of €4,500 in the past three months and registered a second consecutive quarterly fall (-1pc) since the start of the year. Over the last 12 months, Dublin values have shed 2.2pc, which leaves the price of an average home in the capital at €433,000. However, this still stands at almost two to four times the value of property elsewhere in Ireland. The data is contained in the latest Irish Independent/Real Estate Alliance (REA) Average House Price Index, which measures the recent actual sale prices of three-bed semis, Ireland's most typical home type. Unlike surveys based on asking prices (which are aspirational), the data is based on real transactions.

The steady price slippage in the capital is attributed to loan ceilings which are keeping buyers out of the market, as well as the impact of increasing numbers of new home schemes (which devalue existing properties nearby). Increasing construction labour costs are also reducing the sale value of second-hand homes in need of work.

It was also recently revealed that lenders have been failing to pay out the full quota of their annual loan limit exemptions, which also reduces the number of buyers overall, or knocks them down a rung of the property ladder.

The value of an average three-bed semi-detached house nationwide is now €236,028, the Q2 Irish Independent/REA study has found - a very slight rise of 0.05pc on the Q1 2019 figure of €235,898.

Overall, the average house price across the country rose by 1.54pc in the past year - now rising slower than the 2.96pc recorded in the quarter to March and an indication that Ireland's property market is continuing to steady after an 8pc overall annual rise in the heated year to June 2018.

Stock photo: Bloomberg
Stock photo: Bloomberg

South county Dublin has seen the most slippage nationwide, with average house values shedding €6,500 (-1.6pc) in three months - a loss of more than €2,000 per month and moving down 3.3pc over 12 months.

The higher availability of more affordable homes in north county Dublin areas such as Swords, Skerries and Balbriggan has kept more homes loan-friendly and so it means prices have remained much the same as they were a year ago.

In contrast, Longford prices now stand at 22pc higher than a year ago with values increasing from €96,000 to €117,000 in just 12 months, and by 1.7pc since March.

In Leitrim, prices jumped from €80,000 to €90,000 in the past three months, due to increased demand and limited supply - an increase of 12.5pc on quarter one and making Leitrim prices the fastest movers over the last quarter.

Prices are now up 21.8pc in Leitrim on one year ago.

Meanwhile, as buyers become priced out of Galway City (0pc change over three months) and Cork City (+0.8pc), we are witnessing a surge in the value of average homes in their county hinterlands. Cork County values are up by 3.3pc (10pc over the year) and Galway County values have hiked by 3.1pc (by 6.5pc in one year).

Aside from Meath, where values fell by 2.5pc in three months (thanks to new home construction), prices rallied slightly in Dublin's commuter counties in the last three months, with the average house now selling for €249,167 - marking an annual rise of 1.17pc. Louth prices are up 1.2pc in three months, Kildare prices are up 2pc and Wicklow prices rose 0.3pc in the same period.

"Wherever we have new homes on the market, they are definitely having an effect on prices in the existing market as they operate in their own price structure, with buyers prepared to pay a premium for A-rated properties," said REA spokesperson Barry McDonald.

Meanwhile, the report also shows a 2pc reduction in cash buyers in the market in the past three months, with mortgage-approved house hunters now making up 83pc of purchasers, in turn increasing the effect of the Central Bank lending limits on the market.

This is in marked contrast to the years immediately after the crash, when cash buyers made up the majority of all sales.

"Looming over what has been a vibrant market up to now is Brexit, which has been cited as a factor in the longer decision-making in the capital and also at holiday home locations around the country," said Mr McDonald.

In some West Cork locations, it is now taking 14 weeks to sell a home.

Average time to sell nationwide has risen from seven weeks to eight - up two weeks on a year ago.

In the county areas of Dublin the average time has risen to nine weeks.

Irish Independent

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