Slowdown in Dublin house prices

HOUSE prices in Dublin grew by less than 1% in the final three months of last year, but the average home in the city now costs just shy of €340,000.

New statistics from the estate agents Douglas Newman Good (DNG) reveal that in the fourth quarter of 2003 second-hand house prices rose by just 0.68% and by 9.45% for the year as a whole. In 2002 house prices in Dublin increased by 21%, though the outlook for this year indicates more sustainable levels of growth.

“Twelve months ago we forecast that house price inflation in Dublin would average out between 8% and 10% for 2003 and this proved to be the case,” DNG’s economist Paul Murgatroyd said yesterday.

“The slowing rate of growth in prices is good news for all sectors of the market with equity levels continuing to increase for those that already own property and the slowing rate of increase is positive news for those wishing to get on the property ladder as the days of price increases spiralling upwards are gone.”

Price growth was lower in the fourth quarter as more properties became available. According to estate agents, almost half of the houses in city saw no growth in prices between October and December, while the value of one in 10 actually fell.

The DNG report predicts that this year second hand house prices in the Dublin will go up by 6-8%, with most of the increase likely to materialise in the first six months of the year.

DNG said the slowing rate of growth was positive for first-time buyers and even though the average price now stands at close to €340,000, there was still a healthy supply of property for sale for under €250,000 and in some locations for less than €200,000.

Mr Murgatroyd said the outlook for the property market this year is solid although supply in the market has increased, there is sufficient demand for the properties on offer, chiefly in the mid to upper end of the housing market as people continue to trade up to larger properties.

“Many buyers are taking advantage of the low interest rate environment which looks set to remain in place for the rest of this year and the risk of a sharp rise in interest rates remains low,” he added.

Later this week PermanentTSB will publish house price data for the whole of the country, which is expected to show that prices nationally rose by around 12-13% in 2003, with several areas of the country, mainly in the south-east, growing faster than the national average.