The price of an average three bedroom semi detached house in the Fingal area has declined by 1.97% in the first three months of 2015, with an overall 2.28% increase in prices in the last six months, according to a national survey carried out by Real Estate Alliance.
In Skerries prices have dropped by €20,000 in three months, with the average semi detached home now costing €290,000, with REA agents noting the impact of the Central bank’s new deposit rules and more cautious buyers.
While demand is high for properties close to the €220,000 threshold, the Central Bank’s restrictions on deposit requirements have had an immediate effect on the capital’s housing market, with lack of suitable supply another major factor.
The Real Estate Alliance Average house index concentrates on Ireland's typical stock home, the three-bed semi, giving a picture of the property market in towns and cities countrywide.
It now takes ten weeks to sell the average house in North Dublin, a figure that has remained unchanged since September 2014.
REA agent Dermot Grimes says the Central Bank’s new deposit rules have definitely had an impact in the market, but buyers are also happy to take their time.
“Prices have come back to mid-2014 levels. The market has stagnated due to the immediate impact of the new lending restrictions, allied with the emergence of a more cautious buyer who is prepared to wait for the right house,” said Mr Grimes.
“The market has softened in the past few weeks with most of enquiries for properties under €200,000 and activity for large properties has become quiet,” said Hugh Cumisky of REA Cumisky, Balbriggan, where prices have increased by €5,000 to an average of €205,000.
The average semi detached house nationally, including Dublin, now costs €187,153 the latest REA survey has found – a rise of 16.23% over the past 12 months.
However, the average house has risen by just 1.32%, or €7,005, across the country over the December 2014 figure of €184,713 – and the lack of a supply of suitable housing is a feature of the market across the country.
“There is an acute lack of supply of three-bedroom family homes because it is still not financially viable in many areas for builders to construct homes and make a profit,” said REA Chief Executive Philip Farrell.
“In country and commuter areas where the average value is below €200,000, supply of new homes will remain reduced even if lands become available due to profitability issues for developers who need houses to sell for above that mark.
“This is caused by the current high cost of construction which is exacerbated by the significant taxes which are payable on a new home (28% of the cost) and the recently increased building regulations.“
And while Dublin led the way in the market recovery last year, prices have fallen by -0.28% in Dublin city and county in the opening quarter, where the average semi-d now stands at €352,500.
In a complete shift in the market, the biggest increases over the last year have come from what is termed Tier Three – the country areas, outside of the pale and the major cities, which have gone up by 17.28%, ahead of Dublin city’s 17.18%, and 14.82% when Dublin city and county are combined.
Over the past six months, property price rise rates in the rest of the country (5.1%) have more than trebled that of the capital (1.55%).
In the opening quarter this year, there have been significant increases in Carlow (7.50%) Kilkenny City (7.41%), Waterford City (5%) and Wexford (8%), while the rise in sterling has seen a jump in property prices in Bundoran in Donegal of 7.69%.