Friday 29th March - 2019 The trend of downward house price inflation which was noticeable in the second half of 2018 has continued in the first quarter of 2019 according to the latest house price report from MyHome.ie.
The report, which is published in association with Davy, found that annual asking price inflation is now just 3.3% nationally and 1.1% in Dublin – down from 6% and 3% respectively in Q4 2018.
Despite the downward trend in the annual rate, prices are continuing to rise, albeit at a slower rate. The report found that asking prices for newly listed properties nationally increased by 2% in Q1 while they rose by 1.4% in Dublin.
This means the median asking price for new sales nationally is €271K up €5K from the last quarter while the price in Dublin is €380K, also up €5K. 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 the slowdown in price inflation, which was concentrated in Dublin, was largely due to the Central Bank’s lending rules and unrealistic price expectations rather than uncertainties caused by Brexit.
“At the beginning of 2018, the median loan-to-income (LTI) ratio among first-time buyers in the capital was already 3.5 times income and therefore close to the regulatory threshold. The tightening of the Central Bank of Ireland mortgage lending rules – and the resulting slowdown in price inflation - was always going to be felt first in the capital. It also appears that price expectations in early 2018 were unrealistic and a period of adjustment has taken place as a result.”
“Interestingly our analysis shows that the slowdown has been concentrated in the most expensive property types and areas. For example, the median asking price for four-bedroom detached houses in Dublin is flat on the year at €650K. However, prices for one-bedroom apartments are up 10.5% on the year to €210K while the price of two-bedroom apartments are up over 8% across Dublin. Despite the current slowdown, we still expect Irish house prices nationally to rise by 4% in 2019.”
“Whatever about the possibility that Brexit uncertainties have held back prices, there are few signs yet that Brexit is holding back transactional activity. Residential transactions grew by 4% in 2018 to 57,000 and we believe volumes in January and February were also up 4% on the same period last year” he said.
The Managing Director of MyHome.ie Angela Keegan said the fact that we are seeing more transactions, more properties on the market and lower price increases were all positives for prospective buyers.
“There were 21,250 properties listed for sale on MyHome in March, up 13% on last year. The improvement has been particularly marked in Dublin, where 5,200 properties were listed for sale – up 35% on the 3,900 recorded this time last year. The increase in stock may very well be a contributing to the lower rate of price inflation in the capital.”
“With 18,100 units completed in 2018, it is clear that new construction is starting to add to supply. There are currently 509 new housing developments listed on MyHome. While this is still short of meeting natural demand, the graph is definitely going in the right direction” she said.
According to the report the average time to sale agreed nationally has risen to 4.8 months and to 3.9 months in Dublin.”