House prices fall 1.4% in the capital

House prices rose sharply outside Dublin but fell in the capital between June and September, according to the latest House Price Report released today by property website Daft.ie.

During the three-month period, the average asking price in Dublin fell by 1.4%, only the second fall in over three years. Outside Dublin, however, the average asking price rose by 3.9%.

The national average asking price in the third quarter of 2015 was just over €205,000, compared to just under €190,000 a year ago and €164,000 at its lowest point in early 2013.

While prices in Dublin fell, prices in other cities rose strongly for the third quarter in a row. In Cork, prices rose by 6.8% while, in both Galway and Waterford cities, there was a 7.2% increase in just three months.

The largest increase was in Limerick City which saw a 7.7% increase in prices between June and September. Outside the major cities, prices were up 3.5% during the same period.

This means that year-on-year, house price inflation in Dublin has slowed dramatically, from 24.5% in the third quarter of 2014 to just 2.4% in the same period in 2015.

This occurred at a time when there was a substantial increase in price inflation elsewhere, both in cities outside the capital (from 10.5% to 17.9%) and in rural areas (from 8.4% to 12.5%).

An analysis of Property Price Register transactions reveals similar trends, with annual price inflation in Dublin (at 2.6%) well below other cities (17.7%) and the rest of the country (15.7%).

The author of the Daft.ie report, Ronan Lyons, said: “The latest figures confirm that the Central Bank borrowing rules have had a dramatic impact on house price inflation in the dearest parts of the country.

“In year-on-year terms, house prices are now falling in Dublin 6, Dublin 14, and Dublin 18, while in other expensive markets — such as Dublin 4, Dublin 6W, and south Co Dublin, they are effectively static.

“This immediate cooling of the market is to be welcomed, although a side-effect of the income caps is a shift in demand elsewhere in the country.”

This is seen clearly in Dublin’s commuter counties, where house prices have risen 14% over the last 12 months.

“In Ireland’s other cities, where year-on-year inflation is at 18%, this is arguably Central Bank income caps acting as a target, rather than a constraint,” said Mr Lyons.

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