Back in February, we published a report compiled by the Institute of Professional Auctioneers and Valuers (IPAV) that showed the first signs of a slowdown in house price inflation in Dublin. In August, the CSO's monthly index of house prices showed increases in the city were cooling off, dropping from 11.4pc last June down to 8.4pc year on year.
Now the latest report from IPAV, published yesterday, shows that Dublin house prices in the city's most expensive areas have not only peaked but fallen dramatically in the first six months of the year.
The price drops were recorded in seven of 14 Dublin areas, and were hardest hit in the city's most exclusive postcodes, such as D4 and D2, but also affected more affordable areas such as D14 and D15.
In Dublin 4, for example, the average price drop for a four-bed semi was €150,000, bringing the average cost down from €1,375,000 to €1,225,000.
However, a two tier market continues nationwide - with house prices in other areas, including the commuter belt and parts of north and south county Dublin, still rising.
Prices in some of the wider commuter belt counties have increased by up to 18pc as they play catch-up with those of the capital, highlighting the distances buyers are prepared to commute to find houses they can afford.
In Laois, for instance, house prices rose by 17.97pc. Yet a buyer could still find a four-bed semi for €213,334, less than a third of the price of a similar type of house in Dublin 3.
Two-bed apartments in many Dublin postcodes as well as in rural counties are still seeing strong price increases, suggesting that huge demand exists for smaller units.
But the price shifts - both up and down - are most dramatic for four-bed semis.
"There has definitely been a correction in different parts of the city," comments Pat Davitt, chief executive of IPAV, "The market is able to allow for a correction to take place," he points out, "which a normal working market should actually be able to do."
He suggests that further price corrections may still be going on.
"I'd say the Dublin market is a market that is working well. I'd say the market in the country is still dysfunctional."
However, Davitt cautions that average figures for each Dublin area can mask micro-markets where prices may be responding differently to the level of supply.
The report, the Residential Property Price Barometer, is compiled from actual sales achieved nationwide by members of IPAV and shows the average price for three types of property - four-bed semi, three-bed semi and two-bed apartment - from January to June this year, and percentage increases compared with the latter half of 2017.
Embassy belt downturn
Diving a little deeper into the figures shows that leafy Dublin 4 has been worst hit as prices for four-bed semis dropped by 12.24pc, to an average of €1,225,000, three-beds fell by 2pc to an average price of €967,500.
Only values for two-bed apartments showed an increase - by 3.61pc, or €415,000 - almost double the cost of a three-bed semi in Cork.
A similar trend is seen in Dublin 2 where the price tag for a four-bed semi fell by 11pc, a drop of €100,000; three-beds also saw prices fall, while two-bed apartments rose slightly by almost 2.5pc.
However, Dublin 4, 2 and 6 were still the most expensive parts of the city in which to buy any type of property.
Impact of increased supply
Other areas where values have fallen significantly include Dublin 15, where a number of large new developments came to market over the past 18 months, including Hamilton Park and Fairhaven. Here values fell by 10.11pc for four-bed semis to an average of €445,000.
Dublin 14, which includes upmarket Churchtown where Hazelbrook Square and Park Developments' Fernbank apartments launched earlier this year, also saw price drops of an average of €65,000 or 9.49pc, bringing the amount a buyer could expect to pay for a four-bed home to €685,000.
Davitt comments that "in some of the areas that we see the biggest drops, we see supply coming on the market".
In fact, the latest figures from the CSO show that 14,446 houses were built in 2017, and 7,909 in the first six months of this year. While these figures falls far short of demand, which has been estimated somewhere between 30,000 and 50,000 a year, the arrival of new homes to market is clearly beginning to have an impact on price.
It's likely too that the Central Bank's tighter lending rules are taking effect, putting a ceiling on the amount that buyers can borrow, and having a knock on effect on prices.
According to John McCartney, director of research at Savills, "Mortgage finance is taut. My understanding is that a number of banks have exhausted the number of their exemptions already."
These exemptions typically allow a buyer to access a loan for 4.5 times their income but banks are restricted in the percentage of loans they can allocate to each category of buyer, with only 5pc allocated to first-time buyers, and 20pc of second and subsequent buyers.
Other Dublin price drops
Three other Dublin areas saw less dramatic price drops.
Values in prosperous Dublin 6, where there is a plentiful supply of period homes, took a slight knock with price reductions for four-beds by 4pc, bringing the average price down to €833,334. Three-beds in the same area fell by 3.7pc or an average of €25,000, down to €675,000. But two-bed apartments saw a rise in values of nearly 10pc to hit €413,334.
Elsewhere, the average four-bed semi in Dublin 1 fell 1.09pc to €460,000, while Dublin 3 which includes Clontarf, Marino and Killester, saw prices fall by 2.86pc for the same house type.
On the up
In contrast, eight areas in and around the city saw price increases for four-bed semis. The strongest surge was in north county Dublin. Prices here rose by 9.75pc to an average price of €499,000 for a four-bed semi, €440,000 for a three-bed, a rise of over 13pc, and €297,250 or a lift of nearly 10pc for two-bed apartments, values which may well have been boosted by the revival of plans for the Dublin North Metro.
In south county Dublin prices rose by 3.93pc to an average price for a four-bed semi of €605,000, while Dublin 24 showed strong growth in values across all property types including two-bed apartments.
Commuter belt spreads
Outside Dublin, house prices in many areas are still rising sharply. One of the interesting trends is the spread of the commuter belt - and consequent rise in prices - led by County Laois, where prices upped by 18pc to €213,334 for a four-bed, and 11pc to €163,334 for a three-bed.
Kilkenny also witnessed large increases, up 14.2pc to €270,000 for a four-bed, while counties Wexford and Offaly saw significant increases of over 9pc each, bringing the price of a family home to €206,667 and €231,667 respectively.
"I think the outlook for the market in the country, which is much more dysfunctional than the city, is for an increase to get prices up to a certain level," says Davitt.
"Buyers are still moving out to the commuter belt to get better value for money, but there are also, he says, buyers moving from other rural counties such as Leitrim and Limerick to the commuter belt to be within driving distance of higher paying jobs in the capital.
Regional cities still rising
In Galway, Cork and Limerick cities, prices continue their upward trend, though at a slower rate as new homes coming onstream ease the pressure off the market slightly.
In Galway city, a four-bed semi goes for an average of €310,000, a rise of just 2.15pc over the latter part of 2017; a three-bed will cost €272,500, 1.5pc, while prices for a two-bed apartment have climbed up by nearly 10pc to €177,500, reflecting the lack of supply of this type of accommodation.
Prices in Cork city have also risen, though stay under double digits.
Here, a four bed semi costs an average of €355,000 or 4pc up on the latter part of 2017; three-beds went for €291,250 on average, or an increase of 6pc; while the price of a two-bed apartment rose just over 8pc to €192,500.
Trends for Limerick were similar, with apartments now at €135,000, a rise of 6pc on last year.
Best value for money
The cheapest counties in which to buy a home in the first half of 2018 remained Longford, Sligo and Leitrim, where average price across all house types came to €101,667, €132,500 and €133,333, although most types showed strong price surges over the latter half of 2017.
A bubble burst?
Despite dramatic price falls in higher-end properties in the city, there is little sign of a property crash. This time round, the Central Bank rules are having a moderating effect, and the outlook is for price stabilisation as more supply arrives.
Commenting on the market in general, John McCartney of Savills says: "In a sense, there is nothing unexpected happening. Strong house price inflation will slow further in the year, we think it will be at 5-6pc by the time we get to the end of the year.
"At some point the gap between supply and demand will close and that will bring more moderate price inflation. It's nothing sinister."