Average property price in Ireland has fallen by 3%, survey finds

Asking prices for houses and apartments dropped in the third quarter, suggesting the annual rate of inflation in Irish properties will have flatlined by the end of 2019, according to the latest house price report from myhome.ie.

Asking prices for residential properties rose at a national rate of just 0.3 per cent in the year to the end of the third quarter, according to the property website’s report, published in association with Davy.

During the third quarter itself, inflation in the average asking price nationally tipped into negative territory, falling 2.8 per cent on the previous quarter to €269,000.

In Dublin the average figure was down 1.4 per cent in the quarter to €376,000. This average is just 0.4 per cent higher than it was a year ago.

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Outside Dublin, the average asking price of €223,000 is down 3.3 per cent in the quarter, while the year-on-year rate of inflation has dropped to 0.6 per cent.

Davy chief economist Conall Mac Coille, the report’s author, said the third quarter often showed a softening in prices, as it covers the traditionally quieter summer months, but that the national decline of 2.8 per cent was higher than usual.

Mr Mac Coille linked the slowdown to the Central Bank of Ireland's prudential guidelines on mortgage lending, as well as Brexit.

“We believe it primarily reflects constraints on home buyers’ leverage from the Central Bank of Ireland’s mortgage lending rules, now accompanied by the uncertainty of Brexit,” he said.

Low supply

The slowdown does not imply that the supply of housing has caught up with demand, he added.

“There were 19,300 housing completions in the year to June 2019, but we believe natural household formation is at least 30,000 per annum if not higher,” he said. This is “well in excess” of current building levels.

Angela Keegan, managing director of myhome.ie, which is owned by The Irish Times, said that although growth in asking prices was softening, other key indicators were still increasing.

“The volume of recorded house price sales continues to grow, rents continue to rise, mortgage lending is up and there was an increase of some 6 per cent in the number of new properties on the market, via myhome.ie, at 10,846,” she said.

“In total there were some 23,700 properties listed on the site in September, which is 4.7 per cent up on the year and is the higher number of properties listed since mid 2015.”