The price of luxury homes in Dublin fell by 2.8 per cent in 2018, the second decline since 2013, as the high-end homes market continues to be hit by a combination of Brexit uncertainty and an increase in the number of properties coming to the market.
According to the Knight Frank Prime Global Cities Index, which tracks prices of high-end properties across 43 global markets, prices in Dublin fell by 2.8 per cent in the 12 months to December, and by 0.6 per cent in the last three months of the year.
The index tracks the movement of prices in the top 5 per cent of the market. In Dublin’s case, that means properties that were priced at €950,000 or more. The recent decline follows a fall of 1.7 per cent in the 12 months to September 2018.
The falls reported in 2018 marked the first time that the cost of high-end homes in Dublin had fallen since the first quarter of 2013.
"A further tightening of lending rules by the Central Bank of Ireland, along with the uncertainty surrounding Brexit and an increased supply of homes for sale has had a moderating effect on the market, although the economic backdrop remains healthy," the report noted of Dublin's performance, which saw it fall back to 38th place, down from 20th in the same period in 2017.
The performance of the high-end market is now lagging that of the broader property market in Dublin, with recent figures from the Central Statistics Office showing that prices overall rose by 3.8 per cent in 2018 in the capital.
House prices rose more strongly than apartments, advancing by 4.2 per cent and 2.9 per cent respectively.
The latest increase means that Dublin residential property prices are now 21.4 per cent lower than their February 2007 peak, but are up by 94.7 per cent on their February 2012 low.
Global view
Overall the global index grew by just 1.8 per cent in 2018, its weakest annual rate of growth since the final quarter of 2009, when luxury housing markets were in the grip of the global financial crisis.
Other cities where the prices of prime residential homes dipped included London, down 4.4 per cent, Dubai, which fell by 3.4 per cent, and New York, down 2.5 per cent.
Vancouver, which placed last, reported the weakest performance. Canada’s third-largest city saw its high-end properties dip by 11. 5 per cent in the year to December, and by 2.5 per cent in the last quarter, on the back of factors such as the introduction of taxes aimed at overseas and speculative buyers.
Edinburgh in Scotland led the index for the first time, with annual growth of 10.6 per cent, driven by “a release of pent-up demand”. Other strong performers were Berlin, up 10.5 per cent, Madrid, which rose by 8.1 per cent, and Paris, up 5.3 per cent.
