Growth in house prices may be slowing for the first time in a couple of years but that is of little succour to people looking for their first homes.
Prices in April were still over 14 per cent ahead of what they were a year ago, on average, according to data from the Central Statistics Office, way ahead of the rate of inflation and of any pay increases.
And while they have eased from the 15.1 per cent rate seen in March, it is also the case that the rate of property price inflation has trebled over the last year.
More importantly, despite the blip in this month’s figures, market analysts see no great prospect of a fundamental change in the trend direction of property prices.
Yes, supply is increasing, though not at anything like the pace needed to address demand. Impending European Central Bank rate rises should also have a cooling effect on the market. But, on the flip side, inflation in some construction raw materials is far outstripping the overall consumer price index and labour costs are also rising sharply amid a squeeze on supply in that quarter.
According to Pat Davitt, the chief executive of the Insititute of Professional Auctioneers and Valuers, most auctioneers now have “a pipeline of buyers on their books for whom suitable properties are not available”. Sellers, he says, are also affected as “they do not want to put their properties up for sale, in case they do not find a suitable property to buy”.
Furthermore, there is a growing cohort who cannot qualify for mortgages of sufficient size to acquire a first home, even if those properties were available in sufficient numbers. Central Statistics Office data, which points to a significant gap in the pace of house price growth between Dublin and the rest of the State, suggests that many of this group are now looking for homes well beyond the capital, with the most rapid price increases evident along Border counties in the year to April. The new trend towards hybrid working may be playing a part there.
The result is that while prices in the capital are over 10 per cent shy of their Celtic Tiger peaks, property elsewhere is just 3.2 per cent shy of those levels.
Fundamentally, the market remains dysfunctional. Policymakers need look no further than those people paying rents that are far in excess of what they would pay for a mortgage on an equivalent property. No minor slowdown in the rate of price rises is going to solve the housing crisis.
