House prices are increasing across Ireland but a lack of affordability in Dublin along with tighter bank lending is slowing growth, according to a report Wednesday by Irish real estate website MyHome.ie.
Prices of newly listed properties across Ireland rose 4.8% in the past three months, while prices in Dublin alone rose 3.3%. Newly listed properties are seen as the most reliable indicator of future price movements, said the report, a collaboration between MyHome.ie and Dublin-based financial advisers Davy.
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Across Ireland, asking prices for newly listed homes are up 9.5% annually to €260,000 (US$318,159), while in Dublin, prices have risen a little less, 8.2% in the last 12 months to €345,000 (US$422,173).
Prices for all types of properties, old and newly listed, rose by 1.9% nationally and by 1.8% in Dublin in the last three months, the report said.
"The tightening of the Central Bank mortgage lending rules coupled with stretched affordability was always likely to be first felt in Dublin," said Conall MacCoille, chief economist at Davy. "Inflation in Dublin is now 8.2%, down from just over 11% in quarter four 2017. The cooling off is already evident in more expensive areas and property types," he said in the report.
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In January, Ireland’s Central Bank reduced the number of second-time and subsequent buyers that will be able to borrow more than 3.5 times their income for a mortgage.
Activity at the top of the Irish market, though, shows no sign of slowing.
"Our analysis of the Property Price Register shows that the number of house sales above €1 million (US$1.22 million) rose to 826 in 2017, up 25% on the previous year. There are currently 506 properties with an asking price exceeding €1 million listed for sale on MyHome.ie," said Angela Keegan, managing director of MyHome.ie, in the report.