The price of an average three-bed semi in Dublin city has fallen by over €19,000 in the past three months as the new rules on mortgage deposits take effect, according to one national estate agency group.
The average semi detached house nationally now costs €186,968, the Q2 Real Estate Alliance Average House Price Index has found – a slight fall on the Q1 figure of €187,153.
The REA Average House Price Index concentrates on the sale price of Ireland's typical stock home, the three-bed semi, giving an up-to-date picture of the property market in towns and cities countrywide.
The price of an average three-bed semi in Dublin city has fallen by -5.02% from €381,667 to €362,500 since the end of March as the new rules on mortgage lending begin to take effect on the market.
The new rules on mortgage lending for houses above €220,000 have contributed to an already apparent softening in the Dublin market, according to REA.
Some areas in the higher end of the south Dublin city market have seen selling prices fall by up to €35,000 (or -7%) since Q1, where the average three-bed semi would sell in the €400,000 range.
However, the market remains relatively stable in areas such as Tallaght and Lucan where prices are closer to the €220,000 threshold but houses are now taking a week longer to sell on average.
"Our survey measures house sales right up the end of June and what we are seeing is the first genuine effects of the mortgage deposit rules on the market," said REA CEO Philip Farrell.
"The rules were brought in to take the heat out of the market, and they have done that, but combined with rising rents and the ending of the Capital Gains Tax exemption, they have had a supressing effect.
"What we are seeing on the ground is a slowdown in interest in the traditional professional properties, as couples find that raising an €80,000 deposit for a €400,000 home is simply beyond their means.
“Our report shows that the average property is now taking seven weeks to sell across the country, and our agents are reporting that the time then required to bring the sale to completion has increased noticeably in recent months due to changes in the mortgage process.
“The time taken to sell the average property in Dublin city and county has jumped from six to eight weeks since Q1, putting it behind the national average for the first time.”
“The average three-bed semi price in the commuter counties and other major cities has continued to rise by 1.23% since March and now stands at €202,882 as buyers seek out affordable commutable housing.
“While some Dublin values are falling, property in Louth is taking off with selling prices in Drogheda rising by over €22,000 or 12.98% in the past three months.
“The price of an average three bed semi in Drogheda has risen from €175,000 in March to €197,500 at the end of June with increased interest from Dublin and commuter purchasers who can find suitable properties under the €220,000 threshold within an hour's commute of the capital.
“We are also seeing a continued improvement in what we term tier three, the rest of the country where prices have risen by 1.32% in Q2 to €119,828.”
The survey shows Q2 rises in Limerick (10.71%), Cork county (9.9%), Kerry (8.39%), Donegal (5.00%), Wicklow (3.33%), Leitrim (3.13%) and Tipperary (2.59%) with Sligo registering a -5.56% fall.
“Supply is still a major issue for agents, with micromarkets existing in counties such as Meath, based on the availability of suitable family homes in each town.
“Where prices are relatively low, and builders can make a profit, we are seeing activity such as a 10.71% rise in Limerick where house prices have increased by €15,0000 to €155,000 since March.”
According to REA, because of the holiday season, the indications are that any significant changes in price will not occur until the end of Q3.
Real Estate Alliance (REA) is Ireland’s leading property group of Chartered Surveyors with over 50 branches nationwide, comprising many of the country’s longest-established auctioneers and estate agents.
Ends
Available for interview:
Philip Farrell, CEO Real Estate Alliance
086 250 3515 / philip@realestatealliance.ie
Media information:
Darren Hughes, MediaConsult 086 2937037
