Residential property prices up 6% this year but auctioneers forecast market to slow

Various estate agent signs outside an estate in Clane, Co Kildare, last year. Picture: Colin Keegan, Collins Dublin

Residential property prices increased by more than 6% to reach an average of €315,061 in the first half of 2022, according to a new report.

The report also showed a slowing in price increases in the market, which are expected to average at 2% for the remainder of the year.

The Residential Property Price Barometer published by the Institute of Professional Auctioneers and Valuers (Ipav) records prices actually achieved by auctioneers rather than asking prices.

Regional breakdown

The top six most expensive areas to buy a property in Ireland were all areas of Dublin, with Dublin 4 leading the market by far at an average of €928,333, and €1.325m for specifically four-bed semis.

Longford remains the cheapest county in the country at an average of €140,000, followed by Roscommon, Tipperary, Cavan, Leitrim, and Mayo.

In Munster, Cork City increased by 6.49%, with the biggest increase was seen among two-bed apartments at 9.95% to €262,500. 

Cork County recorded the fifth-highest apartment price rise of 9.15% to €155,143. A three-bed house cost on average €327,000 in the city, €276,143 in the county, €279,500 in Limerick, and €255,000 in Kerry.

A young person walks by a window sign advertising mortgage appointments on Dublin's Wicklow Street. Picture: Leah Farrell / RollingNews.ie

The slowest price growth in the sector was seen in Tipperary which increased by just 2.82% to €182,500, including the fifth-cheapest average prices for three-bedroom semi-detached houses in the country.

The report said that buyers “took advantage of very low prices relative to the national average”, resulting in cheaper counties experiencing higher increases. It said properties in Dublin were increasing at levels below the national average.

The highest increases among three-bed properties were seen in Galway City (12.9% to €350,000), Clare (11.52% to  €230,000), Carlow (10.98% to €227,500) and Waterford (10.77% to €240,000).

In the four-bed category, the highest increases were seen in Roscommon (10.42% to €198,750), Wicklow (10.28% to €472,000), Clare (9.81% to €285,500) and Limerick (9.79% to €322,500).

Market slowdown

Although overall increases settled at 6.36% across the country, slightly ahead of the 6% seen in the previous six months, Ipav chief executive Pat Davitt said the first four months of the year “would have been of the order of 10%”, but market changes in May and June brought the figure down.

In the latter two months, the practice of increasing reserves — where the price expectations of neighbourhood sellers tend to escalate when a property achieves a particular level — had almost disappeared,” he said.

He said price increases are likely to slow further and “in the next six months we would expect prices to taper to about the 2% mark, with some of the more expensive areas experiencing no increases at all”.

Mr Davitt said increasing interest rates “are bound to dampen sentiment, especially with the hike of 1.25% already and further to come”.

“As prices are slowing, more properties are coming onto the market, as tends to happen in this kind of environment,” the report said. 

“We’ve had the 0.5% mortgage increase in July and could see a further 1% before year-end. Many mortgage holders, apart from those on tracker mortgages, did not feel the impact of the 0.5% increase yet since several lenders absorbed it. 

"But with any further increases, more potential purchasers will be excluded from the market.”