High-end housing market flattening with unrealistic asking prices

Unrealistic asking prices alongside the Central Bank's lending rules are causing property at the higher end of the house market to flatten, a report from property website myhome.ie has found.

Home prices rose 2 per cent in the first quarter across the Republic compared with the last three months of 2018 and just 1.4 per cent in Dublin. This is in line with usual trends, but it still suggests a mid-to-low single-digit increase in prices.

The report, published in association with Davy, found that while property prices were still rising, they were doing so at a slower rate. It found the median asking price for new sales is now €271,000, up €5,000 from the last quarter, while the median price in Dublin is €380,000, also up €5,000.

Davy chief economist Conall MacCoille suggested the slowdown, concentrated in Dublin was more to do with the Central Bank’s lending rules and unrealistic price expectations rather than Brexit uncertainties.

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"The tightening of the Central Bank of Ireland mortgage-lending rules – and the resulting slowdown in price inflation – was always going to be felt first in the capital. It also appears that price expectations in early 2018 were unrealistic and a period of adjustment has taken place as a result," Mr MacCoille said.

He noted that the analysis showed that the slowdown has been concentrated in the most expensive property types and areas. The median asking price for a four-bedroom detached houses in Dublin is flat on the year at €650,000. However, prices for one-bedroom apartments are up 10.5 per cent to €210,000 while the price of two-bedroom apartments have risen more than 8 per cent across Dublin.

“Despite the current slowdown, we still expect Irish house prices nationally to rise by 4 per cent in 2019,” Mr MacCoille added.

Carlow rise

Looking specifically at three-bedroom semi-detached properties, the largest annual rise was in Carlow, where prices rose 25.93 per cent to €170,000. The largest quarterly rise was in Clare, where prices increased 13.18 per cent to €179,950. In Roscommon, meanwhile, prices fell 6.63 per cent on the year to €79,975, while Sligo saw the biggest quarterly drop by 7.5 per cent to €129,500.

MyHome’s report found that there was no sign of Brexit-related uncertainty holding back transactional activity, with transactions up last year by 4 per cent to 57,000.

MyHome managing director Angela Keegan added that the volume of properties listed for sale on the platform in March had risen 13 per cent to 21,250 on the same month in 2018.

“The improvement has been particularly marked in Dublin, where 5,200 properties were listed for sale – up 35 per cent on the 3,900 recorded this time last year,” she said.

The effect of more properties for sale appears to have increased the average time to sell of properties. That metric has risen to 4.8 months and to 3.9 months in Dublin.