Home price inflation cools despite surge of past year

The rate of Irish home sales price inflation slowed somewhat in the three months to the end of September, but prices remain close to 10 per cent higher than they were a year ago, analysis of the Property Price Register (PPR) has indicated.

A report by Valuemyhome found that the national median sales price for a home was €301,000 at the end of September, up €26,000 on the same period in 2021.

The figures are based on sales data rather than asking prices, meaning that reporting of a sale to the PPR can lag behind the transaction itself.

Dublin, the most expensive county in which to buy a home, and its commuting counties – Wicklow, Meath and Kildare – had median prices higher than the national figure, the analysis indicates.

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The median price of a house sold in Dublin in the third quarter was €435,000, followed by Wicklow at €399,000.

Dublin accounted for close to a third of all sales during the period, while 10 per cent of sales were located in Cork.

Leitrim – the county with the lowest median house price – also recorded the lowest number of new homes, with 101

Monaghan saw the steepest increase in prices year-on-year, according to the figures. Sligo, meanwhile, saw the most rapid home sales price growth on a quarter-on-quarter basis, rising more than 26 per cent between the end of June and the end of September.

Almost all counties experienced price increases compared to the previous quarter, except for Kilkenny, Clare, Louth, Offaly, Roscommon and Wicklow.

Some 858 homes were delivered in Dublin in the quarter, the highest figure nationally, while Leitrim – the county with the lowest median price – also recorded the lowest number of new homes with 101. Still, sales of new homes in Dublin accounted for just 17.6 per cent of the total number of transactions.

By contrast, 37.7 per cent of the total number of units sold in Kildare between July and September were new homes.

Overall, sales prices were up 9.5 per cent in the year to the end of September, compared to a 14 per cent increase in the 12 months to the end of June. Valuemyhome also observed “consistent downward trend” in prices over the last six weeks of the third quarter.

Gareth McKeown, head of valuations at Valuemyhome’s parent company Geowox, said: “Rising interest rates and inflation in the economy are having some impact in the rate of property price inflation.”

However, he said the company does not “foresee prices falling as we move towards year’s end”.

Earlier this week, Marian Finnegan, managing director of estate agent Sherry FitzGerald, said the Irish housing market was unlikely to experience a price correction as a result of the current slowdown because of the ongoing lack of supply.

Speaking as the company published its latest quarterly report, she noted there were just 15,300 second-hand properties for sale nationally in July, representing 0.8 per cent of the total housing stock. This was 34 per cent down on the number of properties being sold in July 2019, which represented a more normalised pre-Covid trading period.

While demand for homes would be squeezed by shrinking household budgets and higher interest rates, Ms Finnegan said the chronically low levels of supply would keep a floor under prices.