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ASKING PRICES FOR three-bedroom semi-detached houses fell by 2.5% in Dublin and by 0.8% nationally in the third quarter of the year. 

According to the latest residential property price report from MyHome.ie, the annual rate of inflation for newly listed properties nationally is now 5.9%, while it’s 2.2% in Dublin – the slowest pace of increase in two years.

This means the median asking price for new sales nationally is €268,000 – down €2,000 from the last quarter, while the price in Dublin is €375,000 – down €9,000. Newly listed properties are seen as the most reliable indicator of future price movements.

The report, which is published in association with Davy, can be read here.  Its author Conall MacCoille, Chief Economist at Davy, said asking-price inflation has slowed as expectations for future growth have been reined in.

The double-digit price inflation we experienced earlier this year was simply not sustainable and the slowdown we predicted earlier this year has now materialised.

MacCoille said some of quarterly decline may be seasonal, “reflecting typically weaker prices at the end of a busy summer trading season”. 

He added that the decline may also be temporary, noting: “It was always likely that house price inflation in Dublin would slow following the tightening of the Central Bank mortgage lending rules.

These rules were aimed at preventing buyers reacting to stretched affordability by over-borrowing, and they have been successful in this regard.

The report indicates that the slowdown is still concentrated in the most expensive property types and locations.

For example, the median asking price for one-bedroom apartments was up 11% in the year to Q3 2018 to €200,000. In contrast, median prices for four-bedroom detached homes remained static at €650,000. 

MacCoille note that, with jobs and wages growth both exceeding 3%, underlying demand “remains exceptionally strong” and inflation is expected to reach 8% by December.

“Brexit of course remains something of a wild card but the key assumption here is that the UK will move to the transition period in March next year, maintaining the status-quo by effectively remaining inside the single market,” he said.

Homebuilding 

The report also highlighted a pick-up in homebuilding activity. In the 12 months to June 2018 there were 16,300 completions, already well ahead of the 14,446 recorded in 2017. In total, planning permissions for 26,750 units have been granted in the 12 months to June.

Angela Keegan, Managing Director of MyHome.ie, said the increase in homebuilding is beginning to result in improved stock levels, particularly in Dublin.

“There were 22,658 residential properties listed for sale on MyHome.ie in September, up 6% on last year.

This is the second consecutive quarter in which the stock listed for sale has increased, breaking the downward trend over the past six years.

“The improvement is even better in Dublin with 5,000 properties listed for sale, up 18% on last year.”

There has also been an increase in transaction figures. The Property Price Register indicates that 34,706 properties have been sold so far this year – an estimated 6% growth in transaction volumes, although the register is not yet fully up to date.

Keegan said the total figure of transactions for the year will likely be close to 60,000, which would be an increase of around 9%.

Nationally, the average time it takes to reach ‘sale agreed’ is 3.5 months, down from 3.8 months previously. In Dublin it has remained steady at 2.9 months.

“This is consistent with higher transaction levels rather than a result of any slowdown in the housing market,” Keegan said.