Soaring house prices forcing buyers out of Dublin, study finds

Homebuyers are being forced out of Dublin and into commuter-belt counties by the lack of affordable homes, according to a new study.

The analysis of the property price register by industry website MyHome.ie, which is owned by The Irish Times, found that the capital’s residential market effectively stalled last year, with sales falling by 2.2 per cent to 18,247.

At the same time, there was a significant pick-up in activity in surrounding counties, such as Wicklow, Kildare, Louth, Laois and Meath.

In Wicklow, residential property sales rose by more than 21 per cent, while in Westmeath they were up by 12 per cent. The report found that eight Leinster counties recorded increases of at least 5 per cent in the number of sales compared with 2018.

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The finding suggests that a significant cohort of buyers are being priced out of the Dublin market, where average prices are now more than nine times the average salary, a level not seen since the height of the boom.

Angela Keegan, managing director of MyHome.ie, said the analysis confirmed a trend of significant activity in commuter counties.

“We knew from our analysis of the property price register for the first half of 2019 that activity in commuter counties was sharply rising, and our analysis this time round proves that this trend continued throughout the year.”

“The affordability of properties in the counties around Dublin is proving to be extremely popular, especially with first-time buyers who are constrained due to the Central Bank’s mortgage-lending rules,” she said.

Sales flat

The study showed that the number of sales nationwide was relatively flat (up 1.6 per cent) in 2019 compared with the year before (58,109 sales in 2019, compared with 57,206 in 2018).

While sales in Dublin, which accounts for about a third of the property market here, declined, transactions in Cork rose by 5.9 per cent from 6,085 in 2018 to 6,447 last year.

The latest Central Statistics Office (CSO) figures show property price inflation nationally was running at 1.4 per cent in November. The weaker trend is being led by a softening of prices in Dublin, where year-on-year growth dropped to 0.7 per cent, and comes amid a significant pick-up in supply.

Last year a total of 21,500 new dwellings were completed, the highest level in a decade and almost five times more than the 4,575 built at the recession’s lowest point in 2013.

However, the figure is still below the level of demand, which is estimated to between 26,000 and 35,000 per annum.

“It is good to see new building starts in these counties have also continued, bringing more homes on the market where they are badly needed,” Ms Keegan said.