One report says house price growth is slowing in the face of cost-of-living concerns and rising interest rates. Another says they’re accelerating, fast approaching the Celtic Tiger peak, amid chronically low levels of supply. Confused? You’re not the only one. Last Friday, property website MyHome.ie, which is owned by The Irish Times, published its latest quarterly report on the Irish market, suggesting asking prices rose by 10.9 per cent year on year in the second quarter, with a median or midpoint asking price of €320,000. This represented a slowdown in annual asking price inflation, which was 12.3 per cent in the previous quarter. The findings roughly tallied with the slowdown in headline inflation highlighted in the Central Statistics Office’s latest Residential Property Price Index, which is based on actual transactions as opposed to asking prices, which put price growth at 14.2 per cent in April, down from a rate of 15.1 per cent in March.
The new narrative is that we will experience a slowdown in property prices, maybe even a small correction, as demand dampens in the face of rising living costs and concerns around higher interest rates. However, property website Daft’s latest report, published on Monday, points to an acceleration in price growth in the second quarter, up from 8.9 per cent previously to 9.5 per cent.
Daft’s figures suggest that asking prices rose by 3.8 per cent in the second quarter alone, the largest three-month gain in nearly two years. Daft notes that on June 1st, there were slightly more than 12,400 homes for sale in the Republic, almost a quarter higher than the all-time low of 10,000 recorded three months earlier.
For the past two years transactional price inflation has exceeded asking price inflation, reflecting the Covid froth in the market. We’re now on a different path. Traditionally MyHome’s basket of properties has been slightly more weighted towards Dublin while Daft’s has been more national. Might this explain the difference between the two barometers? Or might the anomaly just be a bit of statistical noise as the market shifts? The headline rates of inflation – at 10.9 and 9.5 per cent – are not miles apart. Either way, most pundits agree that valuations are stretched and price growth will moderate significantly in the coming months.
