Updated at 7.43am
ASKING PRICES FOR houses in Dublin have declined slightly for the first time in almost three years.
However, asking prices for new sales nationally rose 1.8%.
That’s according to the latest house price survey from MyHome.ie.
It found that asking prices on properties that went up for sale on the website in the last three months actually fell by 0.1% in Dublin.
The asking price for new sales in Dublin is €312k, while the corresponding national figure is €217k, which is up 1.6%.
For the entire stock of properties listed for sale the national figure is €205k while in Dublin the corresponding figure is €286k, up 1.5%.
The percentage change year on year for new sales is 4.8% in Dublin and 6% nationally.
Inflation slowing
The author of the report and chief economist at Davy, Conall MacCoille, said he expects house price inflation to slow to 5% by December, with a similar gain likely in 2016.
MacCoille believes that stretched affordability, the Central Bank’s mortgage lending rules and an improving stock of homes available for sales are cooling price rises, particularly in Dublin.
“The house price to income ratio in Dublin – based on a median asking price of €280k for a three-bed, semi-detached house is now a 6.1 multiple of average incomes of €46k.
“While the ratio varies from 5 in the mid-east to a low of 2.8 in the midlands, the overall figure is 5.3 which is high by international standards.
“The Central Bank’s new lending rules have prevented first time buyers in Dublin from taking out ever higher mortgages – the 20%+ rates of inflation of the Summer of 2014 were simply not sustainable – and this is a positive.
The fact that the number of properties available for sale in Dublin is up 45% to 5,200 compared to this time last year, has also acted as a further brake on price growth.
However MacCoille believes a sustained decline is unlikely.
“Wage growth coupled with tax cuts in Budget 2016 will help to support house price inflation. Private sector earnings grew by 2.4% in the first half of the year and Budget 2016 looks set to implement a €1.2 to €1.5bn giveaway which could boost disposable incomes by 1%.
“These measures and the ongoing lack of housing supply and strong rental inflation will support transaction prices and that is why we are guiding the 5% figure.”
Angela Keegan Managing Director of MyHome.ie said government action to address the lack of supply of new homes in certain areas, particularly in Dublin, is sorely needed.
There were 6,745 housing completions in the first seven months of 2015. While this is up 16% from the same period of 2014 the figures are coming off a very low base and will probably struggle to exceed 13,000 this year, well short of the 25,000 required.
“The low level of new builds needs to be addressed by government through initiatives on planning, the freeing up of development land and the removal of inappropriate levies and charges on residential developments.”
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