House prices expected to rise by average of 4.2% in next 12 months

House prices expected to rise by average of 4.2% in next 12 months

House prices in Ireland are expected to continue increasing in the next 12 months.

A Real Estate Alliance Group (REA) survey finds that prices are expected to rise by an average of 4.2% in the next 12 months, though the spectre of a hard Brexit is causing some uncertainty in the market.

The prediction of further increases in property prices comes on the back of a 4.6% rise nationally in 2018 with the average house now selling for €249,472. The REA Average House Price Survey concentrates on the sale price of Ireland's typical stock home, the three-bed semi, to give an up-to-date picture of the second-hand property market in towns and cities countrywide.

Agents in Dublin city are predicting a rise of 2.8% in the next 12 months, with north county Dublin climbing by 4% and south county Dublin by 3.5%. It follows a 4.64% increase in the capital last year, a trend which motivated many buyers to flock to commuter areas outside the capital.

Outside Dublin, buyers will feel the squeeze too.

In Cork city, prices will rise more than 4% according to local real estate agents. Outside of Dublin, Cork has experienced the slowest growth of the Irish cities, increasing by 2.4% annually to an average price of €317,500. That price has remained static for the past three months with estate agents warning that a shortage of three-bed semis in popular residential areas is causing the slowdown.

"We see steady interest in three-bed semis, but there is still a limited supply of this type of property in mature, popular residential areas. Central Bank lending regulations are also having an effect and keeping a lid on prices," says Michael O’Donoghue of REA O’Donoghue and Clarke in Cork city.

The REA survey predicts that the price of an average three-bed semi in Waterford city is expected to rise by 10% in the next 12 months. It is the biggest increase predicted anywhere in the country, matched only by County Longford, and follows a 7.7% rise in prices in Waterford city in 2018, with prices now at an average of €210,000.

Elsewhere in Waterford, growth is slower but steady and agents predict a 5% rise throughout the year. Prices climbed by 3.8% to €176,500 last year, with no change in the last three months.

The price of an average three-bed semi in County Kerry and County Kilkenny is expected to increase by 2%, according to the survey, with Limerick (4%) and Galway (5%) also climbing upwards.

The average semi-detached house nationally now costs €236,287, the Q4 REA Average House Price Survey finds. Overall, the average house price across the country rose by 4.6% in 2018, down from 11.3% in 2017. According to the REA, it is an indication that the market is slowing down.

A hard Brexit will present the market with challenges across the country, REA also says. The higher end of the market - sales of more than €500,000 - has already been impacted by Brexit, the survey notes, with many buyers holding off in anticipation of the impact of a hard Brexit or a no-deal scenario on sterling.

Similarly, agents in border regions and areas targeted by those in search of a holiday home are likely to wait before making their purchases, according to the REA survey.

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