28th June 2018

“Early indications of a moderation in price inflation in regional centres”

Statement by Marian Finnegan, Chief Economist, Sherry FitzGerald Group Sherry FitzGerald House Price Index Thursday, June 28th, 2018

Sherry FitzGerald, Ireland’s largest estate agents, announced today (Thursday) that the average value of Irish established homes rose by 1.2% in the second quarter of 2018, bringing growth in the year to date to 3.2%. This compares to growth of 4.4% recorded in the opening six months of 2017.  

There was also a notable moderation in the pace of price inflation in Dublin with average values increasing by 1.0% during the second quarter of 2018. Prices in Dublin have grown by 3.3% in the year to date, notably lower than the 4.7% growth in the same period in 2017.

When Dublin is excluded from the national figure, the quarterly increase is 1.4%.  In the year to date, house prices for the rest of Ireland increased by 3.1%, compared to growth of 4.1% recorded in the same period in 2017.   

In the regional centres outside of Dublin, Galway recorded the highest increase of 4.8% during the opening half of 2018, while prices in Limerick and Cork increased by 1.6% and 1.4%, respectively.

According to Marian Finnegan, Chief Economist, Sherry FitzGerald; “After a strong opening quarter, there was a significant moderation in the pace of price inflation, most notably in Dublin and the regional centres of Limerick and Cork. The combination of an increase in the delivery of new homes in Dublin and the tightening of Macro-prudential policy on mortgage lending both appear to have led to this slowdown in price inflation”

The Property Price Register reveals that approximately 11,447 transactions were recorded during the first quarter of 2018 with a total value of €3.1 billion.  Due to the time lag in logging data to the Property Price Register, quarter one data is the most accurate data available. If one excludes multi-family/portfolio sales, the figure declines to approximately 10,900, of which 3,600 were in Dublin. On an annual basis, the volume of sales grew by 5% nationally and 6% in Dublin.  

It is particularly notable that the volume of new dwelling sales recorded on the Property Price Register increased by 41% nationally during the opening quarter of 2018, with a 46% increase in Dublin.  Furthermore, the median value of new dwellings sold increased by 8% on a national basis, while the median value in Dublin grew by 5%.

This continued stability in the price inflation of new dwellings sold this year does point to consistent increase in the volume of starter homes being sold on the market, an indicator of the continued positive impact of the ‘help to buy’ scheme.

Comparing the Property Price Register data to mortgage drawdown data from the Banking and Payments Federation Ireland during the opening quarter of 2018, indicates that 41% of single property transactions did not have a mortgage attached to the transaction, signifying that these properties were likely to have been bought with cash.  The comparable figure in the opening quarter of 2017 was 44%. 

Owner occupier levels remained strong during the opening half of the year accounting for 72% of all purchasers, virtually unchanged from the same period in 2017.  Notably first-time buyers accounted for half of all owner occupiers.    

Finally, an analysis of vendor and purchaser profiles in the opening half of 2018, reveals a continued outflow of investors from the buy to let market. Reflecting the trends of recent years, 34% of vendors were selling their investment properties, while investors entering the market represented only 19% of purchasers.  This trend continues to deepen the supply side crisis in the lettings market, which is already incredibly challenging.

In conclusion, Ms. Finnegan said; “This latest analysis of the residential market does point to the emergence of some positive trends.  Firstly, the positive impact of the increased delivery of starter homes is evident not only in the increase in sales volumes but also in the stability of price performance in this sector. 


Such trends underpin the success of the ‘help to buy’ scheme. Given its success to date it is appropriate to suggest that consideration be given to extending the term of the scheme, which is due to cease in 18 months-time, until such time as the starter home market returns to equilibrium.

There is also evidence of notable moderation in price inflation. This moderation can be partly explained by the increase in stock of new homes.  However, there is also anecdotal evidence that the tightening of the Macro-prudential rules in December last may also be a contributing factor.  This would point to a reduction in liquidity in the market and therefore a tightening of activity as the year progresses.  This could be a retrograde step in a market where activity is already well below long term or international trends.  As such, it needs to be monitored carefully”.

- ENDS -


For any further information, please contact;

Jill O'Neill

Director of Communication

Sherry FitzGerald Group

Ph: 01 2376 500 / 086 252 3277

Marian Finnegan

Chief Economist

Sherry FitzGerald Group

Ph: 01 237 6341 / 086 814 8251

Note to Editors:


(1) Founded in 1982, Sherry FitzGerald has grown to become Ireland’s largest firm of estate agents with over 90 owned and franchised branches throughout Ireland.


(2) The Sherry FitzGerald barometer of second-hand house prices is the longest established index of price performance in the Irish residential market.  Originally established in 1992 the barometer provides a quarterly analysis of price trends in the Irish and Dublin second-hand residential market. 


(3) The basket of properties in the barometer of second-hand houses was expanded from approximately 1,400 units to over 1,600 units at the start of 2017.