Davy downgrades housing forecasts as market cools

Irish stockbroker Davy has downgraded its housing forecasts amid a slowdown in price growth. In response to a report from property website myhome.ie showing inflation at just 0.3 per cent in the third quarter, Davy said it had revised down its forecast for inflation to 1 per cent by December from 3 per cent previously and to 2 per cent for next year.

“Although we expect Article 50 to be extended, providing relief to the housing market in Q4, Brexit uncertainty could well prove to be a drag on sentiment through 2020,” it said.

Myhome.ie’s latest price report indicates that asking prices for houses and apartments dropped in the third quarter and that the annual rate of inflation in Irish properties will have flatlined by the end of 2019.

Asking prices for residential properties rose at a national rate of just 0.3 per cent in the year to the end of the third quarter, according to the report, which is published in association with Davy.

Average property price in Ireland has fallen by 3%, survey finds

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During the third quarter itself, inflation in the average asking price nationally tipped into negative territory, falling 2.8 per cent on the previous quarter to €269,000.

In Dublin the average figure was down 1.4 per cent in the quarter to €376,000. This average is just 0.4 per cent higher than it was a year ago.

Property prices in Dublin are now falling for the first time in seven years, according to the latest official figures from Central Statistics Office (CSO), which show the average cost of a home in the capital fell by 0.2 per cent in the 12 months to July.

Prices in Dún Laoghaire-Rathdown – which is the most expensive region in the country in which to buy property and is typically seen as a key indicator nationally – saw a decline of 6.3 per cent.

The latest figures from the Central Statistics Office show residential property prices nationally rose by 2.3 per cent in the 12 months to July, which was marginally higher than the previous month, but well down on the 10 per cent recorded this time last year.

Average value

Separately, Sherry Fitzgerald said the average value of homes excluding new builds dipped 0.2 per cent in the third quarter, although prices are up 0.3 per cent in the year to date. This compares with growth of 3.7 per cent in the same period last year.

“At this juncture, it appears that the main reasons for this are the tight lending conditions in particular, combined with a more cautious consumer response to the geo-political situation,” Sherry Fitzgerald’s head of residential, Marian Finnegan, said.

“It is essential that we get a long-term solution that allows a steady supply of affordable houses to be built for all cohorts of society. This needs to be achieved through a notable and immediate increase in the supply of rental accommodation in all locations to control the pace of rental inflation and provide much needed accommodation to our growing population.”