The Q2 2022 report, in association with Davy, found that annual asking price inflation slowed to 10.9% nationwide, and was 7.9% in Dublin and 12.7% elsewhere around the country.
Meanwhile, the report found quarterly asking price inflation was 5.3% nationally, 3.4% in Dublin, and 6.1% elsewhere around the country – paints the picture of regional asking prices fuelling the headline figure and this substantial rise in the quarterly rate is not unusual ahead of the busy summer trading season.
This means the median asking price for new instructions nationally is now €320,000, while the price in Dublin is €403,000 and elsewhere around the country it is €270,000.
• Continued evidence of vendors returning to the market with the number of available properties for sale on MyHome.ie rising to 12,700 in June 2022 – up from 11,200 in March.
• Average time to sale agreed in Q1 fell to 2.6 months (and 2.9 months outside Dublin) – both record lows which are indicative of a very tight housing market.
• Average mortgage approval rose to €283,700 – up 9.4% on the year and now above Celtic tiger levels for the first time.
• Residential property market transactions in the first five months of 2022 are up 7% on 2021 and 6% on 2019.
• Over 5,000 housing units were completed in Q1 – an encouraging sign.
• Rents rose by 11.2% in the year to May, still well above pre-pandemic levels.
The author of the report, Conall MacCoille, Chief Economist at Davy, said that 2022 should be a year of two halves, with price inflation slowing down in the second half of the year. “Double-digit inflation and sharp price gains are set to give way to greater concerns on affordability, the economic outlook and the impact of the ECB raising interest rates.”
He said that even though the slowdown has been marginal this quarter, anecdotal evidence from estate agents suggests that the momentum driving asking price inflation earlier in the year, is starting to slow.
“However, we are unlikely to see a repeat of the Celtic tiger era - as mortgage lending rules have kept the market in check. The expected rise in interest rates from the ECB, while notable, will also not have the same negative effect given the Irish market is well insulated at present.”
He said, however, that demand was still exceptionally intense, with the average time to sale agreed falling to a fresh record low of 2.6 months.
He added that average mortgage approval rate was now €283,700 – which is above Celtic tiger levels for the first time – but that the excess demand in the market meant that effectively 20% of homebuyers with mortgage approval are currently failing to secure a property each year.
He concluded: “The possibility of a modest fall in Irish house prices can’t be ruled out, correcting some of the froth built-up since the beginning of the pandemic. However, double-digit declines or a repeat of the Celtic Tiger era housing crash seems very unlikely. This is because the Central Bank of Ireland (CBI) rules have stopped homebuyers taking on too much debt.”
Joanne Geary, Managing Director of MyHome.ie, said: “It is now clear that our prediction in the Q1 2022 Property Price Report, that price inflation would slow down, has been proven correct.”
She noted that rising stock levels were a cause for optimism. “It is encouraging to see stock levels and new listings rise this quarter, albeit from a low base. However, even though we have seen somewhat of a correction, demand is still far outstripping supply and this imbalance needs to be rectified in order for normality to return to the market.”
Full details of the report can be found at www.myhome.ie/reports