Property prices fall in three months to March for first time in a decade
Housing prices fell in the first three months of the year, the first time in a decade there had been a drop in the first quarter of the year.
It was the third quarter in a row of slowing prices.
Prices were down by 0.3pc in the first three months of this year, according to the latest Daft.ie House Price Report.
This is in stark contrast to this time last year when a raging property market was experiencing double-digit price growth.
The fall in prices comes after a slew of mortgage rate rises, and a surge in the cost of living which is giving people less money to spend repayments on a home loan.
Higher interest rates mean banks are stress-testing potential buyers on the basis that lending rates will rise even more.
Prices were effectively static in the third quarter of the year and fell by 0.5pc nationally in the last three months of the year.
Across the country, the average price of a residential property is €308,500, according to Daft.
This is almost 3pc above the same quarter last year, but 17pc below the Celtic Tiger peak.
There has been an increase in the number of homes available to buy, although the number for sale is very low.
On March 1, there were 13,000 properties for sale, up 30pc on the same date last year but still way below the 2019 average of 24,200.
Author Ronan Lyons, an economist at Trinity College Dublin, said that with demand weakening, prices should fall this year.
This is despite the fact that supply is very tight.
Daft.ie, a property portal, said the rate that availability had increased had slowed in all parts of the country.
Dublin prices were on average 0.4pc lower than in the final three months of 2022.
This is the first time since the middle of 2020 that annual inflation has been below 6pc in Dublin.
In Cork city, prices were 0.5pc lower.
In Limerick city, prices were stable, while Galway and Waterford cities saw larger quarterly falls.
They were down by 1.5pc in Galway and by 0.8pc in Waterford.
Outside the cities, prices in Leinster and in Connacht-Ulster fell by roughly half a percentage point, but they rose in Munster, by 0.6pc.
Prof Lyons said: “While demand has weakened, the post-Covid recovery in supply also appears to be weakening, in both new and second-hand segments.
“Thus, while this year is unlikely to bring any substantial increases in housing prices, underlying issues stemming from housing shortages will persist.”
He said that, a year ago, double-digit inflation in housing prices was still prevalent across much of the country.
“Now, very few markets are seeing prices more than a percentage point or two higher than a year ago – and those increases largely reflect increases seen [in] March-June last year.”
He said the supply of second-hand supply responded to prices. When it came to new homes, new supply responded to costs.
Costs had risen and the general expectation was that completion of new homes this year would be well below the 30,000 new homes finished last year, Prof Lyons said.
And if prices continue to fall, that was likely to affect second-hand supply, he said.
The average property price in Dublin city, according to Daft, is €423,593, up 1.5pc in the past year.
In Cork city, the average value is €323,728, a rise of 1.2pc.
Galway city’s prices rose by 2.5pc over the year to €345,880.
For Limerick city there has been a 3pc annual rise to an average of €248,881.
Waterford city had an annual rise of 2.2pc to €224,138, with the rest of the country up 3.7pc at €259,567.
It comes as there has been a fall in the number of people approved for a mortgage in the first two months of the year as higher interest rates bite.
The slowdown in mortgage approvals is despite buyers being approved to borrow more after Central Bank lending limits were relaxed at the start of the year, figures from Banking and Payments Federation Ireland show.