26 December 2018
slowdown in mortgage lending towards the end of the year is putting a stop to
house price inflation in Dublin and surrounding areas, the Q4 Irish Independent
REA Average House Price Index has found.
availability of finance in the market in the latter half of the year is causing
what some agents term the Q4 effect, with mortgage lending significantly
slowing and buyers complaining that they cannot secure funding for obscure
price of a three-bed semi-detached house in Dublin city has increased by just
1.6% in the last 12 months as the Central Bank’s borrowing rules increasingly
define affordability in the housing market.
the capital’s postcode districts saw an increase of just 0.4% in the final quarter
of the year compared to 1.5% in the corresponding period in 2017.
agent, REA Fitzgerald Chambers in Stoneybatter, reported that average prices
dropped by €20,000, or -5%, in the final quarter of the year, with average
sales times increasing from four to eight weeks.
After rising by 12.5% in 2017, the average
price of a second-hand semi-detached house in the capital has increased by just
over €7,000 this year and now stands at €445,167.
In line with the rest of the country, the Dublin
market has become price sensitive with prices in the north of the county rising
by 4.9% to €322,500 in the past 12 months – but remaining static in Swords,
Skerries and Balbriggan in the final quarter.
This is in contrast to South County Dublin
where prices rose 0.2% on the quarter but have risen by just 0.9% this year,
with the average three-bed semi selling for €411,000, and the time taken to
sell rising from six to seven weeks.
The Irish Independent REA Average House Price
Survey concentrates on the actual sale price of Ireland's typical stock home,
the three-bed semi, giving an up-to-date picture of the second-hand property
market in towns and cities countrywide to the close of last week.
“Across the board, agents are reporting that the
supply of finance to the market has decreased as banks use up their exceptions
to the rules in the early part of the year,” said REA spokesperson Barry
is a marked decline in the amount of cash buyers in the market – down from 27%
to 19% – and that is increasing the influence of the Central Bank’s mortgage
lending restrictions on the market.
seems to be a direct correlation between enquiry levels and the difficulty in
obtaining mortgage approvals, and we have seen time taken to sell rise from
five to seven weeks as the year has gone on.
second-hand market has become extremely price sensitive across the country and
it is the areas with quality housing stock available for under €270,000 that
are achieving highest growth.
again there is a drop-off in viewings for four-bedroomed housing in certain
areas where they are priced over €400,000, illustrating the influence of the
Central Bank rules.”
agent, REA Sothern in Carlow, is forthright in their description of buyer
financing in the marketplace.
appears that the lending institutions have used their quotas for the year and
are stringing out loan application processes,” said Harry Sothern.
have fallen through when pre-approved purchasers failed to obtain their
average semi-detached house nationally now costs €236,287, the Q4 REA Average
House Price Survey has found – a rise of 0.6% on the Q3 2018 figure of
the average house price across the country rose by 4.6% in 2018 – a decrease on
the 5.4% recorded to September and indicating that the market is continuing to
steady after an 11.3% overall rise in 2017.
in the commuter counties also slowed to 0.38% in the last three months – an
annual rise of 4.18% – with the average house now selling for €249,472.
is an annual rise of €10,000 and growth of €2,000 in the last three months.
country’s major cities outside Dublin recorded the biggest rise of the quarter
at 1.25%, an annual increase of 5.81%, with an average three-bed semi costing
biggest urban rise was seen in Galway City, where selling prices rose by 2.7%
in the quarter to €282,500 – a yearly increase of 9.7%.
Galway city market remains buoyant, however it is taking a longer to get sales
closed, with average time to sell rising from four to seven weeks in the final
quarter,” said Kevin Burke of REA McGreal Burke.
the higher price points, sales are slower as the number of cash buyers has
dropped from 15 to 10% over the course of the year.”
price of housing in Waterford City, at €210,000, is one of the reasons for its
2.4% rise in Q4, and 7.7% annual increase, according to Barry McDonald.
agents REA O’Shea O’Toole report that demand continues to be strong and asking
prices are being exceeded by competitive bidding., with properties achieving
sale agreed status within four weeks of being put on the market,” he said.
have stayed static in Limerick City in Q4, with its average selling price of
€200,000 representing a 4.2% increase throughout 2018 and local agent REA
O’Connor Murphy stating that an increase in new developments has stabilised the
second-hand residential market.
has experienced the slowest growth of the four, up 2.4% annually, with an
average price of €317,500 remaining static in the past three months and agents
reporting a limited supply of three-bed semis in mature and popular residential
The highest annual increases (7.7%) were once
again seen in the rest of the country’s towns which rose in selling price by an
average of €10,000 in 2018 and which experienced a 0.85% rise in Q4 to an
average of €157,717.
these areas you largely have the perfect storm of affordability within the 10%
deposit range, and no new homes as it is still uneconomical to build in many
places,” said Barry McDonald.
example, our agents Coyne & Cuddihy in Killarney report an excellent market
for new semi-detached houses up to €250,000, but there is little supply as
prohibitive land costs and taxes ensure builders cannot produce houses at this
uncertainty has also had a major effect in some parts of the country, and in
holiday home areas such as Killarney and Bantry buyers in the over €500,000
category are hedging their bets on a rise in sterling if there is no hard
Brexit, which could give them 15% increase in value.
highest rate of increase in the rest of the country in Q4 came in Longford,
where prices rose by 5% to €105,000, giving an annual increase of 16.7%.
as local agent REA Brady state, Longford is still one of the cheapest places in
Ireland to buy property, with lots of head room for further price increases.
highest annual gains in property came in Laois, which rose 18.2% from €165,000
to €195,000, but which was static in Q4.”
There was also a slowdown in the purchasing of
new homes in Dublin in Q4, according to REA agent Paul Grimes.
“New homes were slower than the previous
quarter due to increased supply, astute purchasers, and lending exceptions
having been reached.
“We are seeing these conditions in far greater
volume than in previous years which suggests a changed landscape.
“Construction costs are continuing to climb
with workforce availability under increasing pressure, thus putting upwards
pressure on new homes’ pricing.”
Media information: Darren Hughes,