Mortgage asking prices rise as market stabilises

A new report by property website MyHome.ie and Davy stockbrokers suggested that home buyers are still taking on more debt despite European Central Bank’s interest rate hikes.

In Cork City, asking price growth was muted, at 2%. Picture: Aerial.ie

Home buyers were hit with a 4% rise in asking prices in the June quarter, following three consecutive quarterly declines, as the property market stabilises.

A new report by property website MyHome.ie and Davy Stockbrokers suggested that home buyers are still taking on more debt despite the European Central Bank’s interest rate hikes, which could lead to upward pressure on house prices in the second half of the year.

“Certainly, a fall in Irish house prices in 2023 is still plausible and cannot be ruled out, given the prospect of further ECB rate hikes, but it now looks less likely,” said Conall MacCoille, chief economist at Davy.

However, the report also said that the “surprise loosening” of the Central Bank’s mortgage rules earlier this year could fuel buying activity this year amid further interest rate rises.

The report said that the recent rise in asking prices reflected the typical seasonal upturn ahead of the busy summer trading season and is a “little weaker than last year”.

Annual asking-price inflation is currently running at 2.2% nationally.

The findings in the report overall still point to a tight market as starved supply struggles to satisfy high demand.

The average time across to complete a sale increased from 2.6 months in Q2 2022 to 3.3 months in the same quarter this year. The average asking price increased from €320,000 to €325,000.

At end Q2, there were just 14,000 properties listed for sale on the MyHome.ie website. This total is up 11% annually, but is still well below pre-pandemic levels of over 20,000. The number of new properties within that figure listed on the site also dropped by almost 5% compared to the same period a year earlier.

In Munster, price inflation was still in high-single-digit territory across in Q2. Prices were up 8.7% to €250,000 in Clare and by 8.9% in Kerry to €245,000. Tipperary also saw an 8% gain to €200,000.

Cork county bucked the trend, where asking prices only increased by 3.8% to €275,000.

In Cork City, price growth was also muted, at 2% also to €275,000. In Limerick, county prices were up 6.8% on the year to €235,000 and by 9.3% in Limerick City to €235,000. 

In Waterford county, the median price was up 6.1% to €210,000 and by 2.3% in Waterford City to €179,000.