The rate of house price inflation has halved in the past three months as rising costs cause home buyers to be more cautious, the Q3 REA Average House Price Index has learned.
The actual selling price of a three-bedroomed semi-detached house across the country rose by 1.4% over the past three months to €290,630 – representing an annual increase of 10%.
This is a marked slowdown on the 2.9% quarterly increase recorded in the preceding three months, signalling a cooling of the frenetic demand in the marketplace.
And the index found that A rated homes are commanding a 12% premium over their C rated equivalents – a figure that rises to 16% in the capital as running costs become more important to home buyers.
For an average home, this amounts to a difference of around €36,000 around the country and almost €60,000 in the capital, where the average price for a three-bed semi is ready to break through the €500,000 barrier.
The REA Average House Price Survey concentrates on the actual sale price of Ireland's typical stock home, the three-bed semi, giving an accurate picture of the second-hand property market in towns and cities countrywide.
Time taken to reach sale agreed rose to five weeks from four as REA agents nationwide reported a less frenzied approach to viewing and buying.
While the actual average selling price of three bedroomed homes in Dublin city is about to breach the €500,000 mark, the 0.8% quarterly rise to €497,500 is half that experienced in the previous three months.
“We have seen a definite slowdown in demand levels and the urgency that we were seeing with buyers has reduced,” said REA spokesperson Barry McDonald, whose own area of Lucan reported a 2% drop in prices back to March levels at €410,000.
“The traditional summer lull returned for the first time in a few years and there was no signs of the market heating up again in September, which is good news for buyers.
“Interest rate rises and cost of living inflation are definitely affecting sentiment, with viewers patiently waiting for the right property.
“There is still a massive shortage of housing, but Dublin agents REA Grimes are reporting an increase in supply and a wider choice of properties coming to market, leading to a longer sale time.
“The energy rating of a house is becoming a main talking point, with buyers increasingly taking the cost of heating or increasing the energy rating of older homes into account.”
58% of all purchasers in the past quarter were first-time buyers according to REA, a figure which rose to 76% in Dublin as people with mortgage approval look to get on the housing ladder.
The highest quarterly increase in Q3 was seen in the country’s large towns where prices rose by 2.1% to €207,207.
Commuter counties rose by 0.7% over the past three months, with time taken to sell jumping from three to five weeks.
The sole commuter town to record a drop was Dundalk in Co Louth, where prices fell by 4% to €240,000 in three months, with agents REA Gunne recording a notable slowdown in viewings and enquiries.
Cities outside the capital experienced a 1.7% rise to an average selling price of €303,750.
Prices in Galway city rose by 3.1% to €330,000, with the average home taking just four weeks to sell.
Cork increased by 1.4% to €350,000, with 40% of homes being sold to first time buyers, while Waterford City prices were steady.
Limerick saw prices increase by 1.9% to €265,000 with agents REA Dooley reporting a modest rise in properties coming to market, and a slowing in activity at the higher end of the market.