The price of an average family home in Dublin has fallen dramatically since the introduction of new Central Bank rules.
At the same time, the cost of a three-bedroom semi- detached house in Cork City has risen by 3.77% to €275,000 in the past year, according to a national survey carried out by Real Estate Alliance.
The price of an average three-bed semi in Dublin City has fallen by 5.02% from €381,667 to €362,500 since the end of March as the new rules on mortgage lending begin to take effect.
Some areas in the south Dublin city market have seen selling prices fall by up to €35,000 (or 7%) since the first three months of 2015, where the average three-bed semi would sell in the €400,000 range.
However, the market remains relatively stable in areas where prices are closer to the €220,000 Central Bank threshold.
“Our survey measures house sales right up the end of June and what we are seeing is the first genuine effects of the mortgage deposit rules on the market,” said REA chief Philip Farrell.
“The rules were brought in to take the heat out of the market, and they have done that but, combined with rising rents and the ending of the capital gains tax exemption, they have had a suppressing effect.
“What we are seeing on the ground is a slowdown in interest in the traditional professional properties, as couples find that raising an €80,000 deposit for a €400,000 home is simply beyond their means.
“The average three-bed semi price in the commuter counties and other major cities has continued to rise by 1.23% since March and now stands at €202,882 as buyers seek out affordable commutable housing.
“We are also seeing a continued improvement in what we term tier three, the rest of the country, where prices have risen by 1.32% in Q2 to 119,828.”
The REA Average House Price Index concentrates on the sale price of Ireland’s typical stock home — the three-bed semi — giving an up-to-date picture of the property market in towns and cities countrywide.
“The market is steady but there is a lack of supply of three beds in Cork city and surrounding areas,” said Michael O’Donoghue from REA O’Donoghue Clarke in Cork.
The price of an average three bedroom semi detached house in Co Cork has risen by 9.09% to €120,000 in the second quarter of 2015.
The REA survey shows more pronounced changes than those indicated in the last daft.ie house price report, which said the average increase in Dublin between March and June was 0.6% while in Cork, prices rose by 4.4%, Galway by 3.8% and Limerick by 5.1%.