Growth in prices is at its lowest level in five years, with Dublin showing the most significant cooling off, reveal new figures show from MyHome.ie
Property price growth has slowed nationally – with Dublin showing the most significant cooling off, new figures show.
The latest report from MyHome.ie found that annual asking price inflation fell to 2.4% nationally in the second quarter of the year – the lowest level it has been in five years.
In Dublin, that figure entered negative territory for the first time since 2013. It is down to -0.6%.
Despite the downward trend in the annual inflation rate, the report – which is published in association with Davy – found asking prices are continuing to rise, albeit at lower rates.
Asking prices nationally rose by 2.1% in the second quarter of this year when compared with the previous quarter.
In Dublin, prices rose by 0.5% in the same period, the weakest second-quarter gain since 2012.
Overall, the median asking price for new sales nationally was 276,000 euro, up 5,000 euro on the previous quarter, while the median asking price in Dublin was 382,000 euro, an increase of 2,000 euro.
Outside of Dublin, there was stronger growth, with prices increasing by 7,000 euro in the quarter to 231,000 euro.
Newly-listed properties are seen as the most reliable indicator of future price movements.
The author of the report, Conall MacCoille – chief economist at Davy, said that while the price falls may fuel fears of a more damaging downturn, the reason for the price falls this time round were as a result of increased regulation.
The Central Bank of Ireland tightened its mortgage lending rules last year.
The current slowdown in price inflation is largely due to the Central Bank’s lending rules and stretched affordability, he said.
MacCoille said that these factors are preventing the latent housing demand from translating into rampant house price inflation fuelled by rising leverage on mortgage loans.
Ireland’s economy continues to perform well and the property market will continue to be underpinned by high employment and wage growth. While the economy has been driven by strong foreign direct investment, export growth and a slow rebound among indigenous companies, the recovery in home building is still in its infancy, he said.
Angela Keegan, managing director of MyHome.ie, said the fact that there are more transactions, more properties on the market and more sustainable price increases were all positives for prospective buyers.
The environment for buyers is becoming much more favourable, with 22,600 homes listed for sale in June 2019 on MyHome, up 4.5% on the same period of 2018, Keegan said. The improvement is especially marked in Dublin, with 5,400 homes listed for sale on MyHome – up 9% on last year.
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