Growth in asking prices for residential properties is beginning to slow, with Dublin sellers in particular reining in expectations as Central Bank mortgage rules start to take effect, according to a new report from MyHome.ie.
Although the asking prices for properties rose 5.9 per cent in the year to September across the Republic, prices fell 0.8 per cent compared to the previous quarter.
The picture in Dublin showed that while asking price have increased 2.5 per cent in the last 12 months, prices actually fell 2.5 per cent in the third quarter compared to the second quarter.
MyHome.ie, the property website owned by The Irish Times, found that as growth in real sales prices is slowing, so too are asking prices. In Dublin, the median asking price for new sales was €375,000 in the third quarter, down €9,000 on the second three months of the year.
Davy chief economist Conall Mac Coille said double-digit price inflation experienced earlier in the year was “simply not sustainable and the slowdown we predicted earlier this year has now materialised”.
“While the magnitude of the drop this quarter may be surprising, some of the quarterly decline may be seasonal, reflecting typically weaker prices at the end of a busy summer trading season,” he added.
The report notes that inflation in asking prices across the State in the last 12 months is at its weakest pace in two years, reflecting a slowdown seen in the Central Statistics Office (CSO) Property Price Index.
Because MyHome’s report looks at asking prices, it offers an earlier snapshot of the market than the Property Price Index, which tracks sale prices.
Welcomed
The slowdown, MyHome says, should be welcomed and means that Central Bank rules restricting the amount a person can borrow are starting to have an effect.
“Not surprisingly, the impact has been felt first in the capital, Dublin,” the report said.
MyHome found the most expensive properties saw the most significant slowdown. The median asking price for a one-bedroom apartment was up 11 per cent in the year, to €200,000, while the median for four-bedroom detached homes was flat at €650,000.
“With jobs and wages growth both exceeding 3 per cent, underlying demand remains exceptionally strong and we expect inflation to equal 8 per cent by December,” Mr Mac Coille said.
The fall in median prices comes amid an increase in supply. "There were 22,658 residential properties listed for sale on MyHome.ie in September, up 6 per cent on last year," said MyHome managing director Angela Keegan.
“We are also seeing an increase in transaction figures. The Property Price Register indicates that 34,706 properties have been sold so far this year, and we estimate this represents a 6 per cent growth in transaction volumes, although the register is not yet fully up to date. We believe the total figure of transactions for the year will be close to 60,000, which would be an increase of around 9 per cent.”
Declining
Those higher transaction levels mean the average time to go “sale agreed” is declining. Across the State, the timeframe is 3.5 months, down from 3.8 months previously. In Dublin it is steady at 2.9 months, a figure that is consistent with higher transaction levels, according to Ms Keegan.
In the three-bed semi-detached category, Galway, Sligo and Kilkenny all recorded decreases in asking prices quarter-on-quarter. The most significant fall was in Kilkenny, with a drop of 2.91 per cent. The highest quarterly rise, meanwhile, was in Limerick, where median asking prices rose by 6.85 per cent. On the year, prices for three-bed properties in Limerick have increased 24.6 per cent. No county recorded a fall compared to the same period last year.
