Sherry FitzGerald, Ireland’s largest estate agents, announced today (Monday) that the average value of Irish established homes rose by 0.5% in the third quarter of 2018, bringing growth in the year to date to 3.7%. This compares to growth of 6.8% recorded in the opening nine months of 2017.
There was also a notable moderation in the pace of price inflation in Dublin with average values increasing by 0.3% during the third quarter of 2018. Prices in Dublin have grown by 3.6% in the year to date, notably lower than the 7.3% growth in the same period in 2017.
When Dublin is excluded from the national figure, the quarterly increase is 0.7%. In the year to date, house prices for the rest of Ireland increased by 3.8%, compared to growth of 6.2% recorded in the same period in 2017.
In the regional centres outside of Dublin, Galway recorded the highest increase of 5.0% during the opening nine months of 2018, while prices in Limerick and Cork increased by 1.6% and 1.9%, respectively.
According to Marian Finnegan, Chief Economist, Sherry FitzGerald; “The latest data on price performance indicates a notable slowdown in the pace of price growth. This is most significant in the Dublin market. A more limited mortgage market due to tighter lending policy introduced towards the end of 2017 and an improved offering in the new homes market have collectively resulted in the slowdown in the pace of inflation. As such, it appears the market is pausing for breath and adjusting to the altered circumstances rather than any significant alteration in market conditions.”
The Property Price Register reveals that approximately 24,600 transactions were recorded during the first half of 2018 with a total value of €7.2 billion. Due to the time lag in logging data to the Property Price Register, quarter two data is the most accurate data available. If one excludes multi-family/portfolio sales, the figure declines to approximately 23,300, of which 7,600 were in Dublin. On an annual basis, the volume of sales grew by 5% nationally and 7% in Dublin.
It is particularly notable that the volume of new dwelling sales recorded on the Property Price Register increased by 31% nationally during the opening half of 2018, with a 43% increase in Dublin. Furthermore, the median value of new dwellings sold increased by 9% on a national basis, while the median value in Dublin grew by 3% year-on-year.
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. This is real evidence of the positive impact of the ‘Help to Buy’ scheme.
Furthermore, excluding new homes reveals growth of only 1% in second hand sales year on year and notably a 1% contraction in second-hand sales in Dublin in the same period.
Comparing the Property Price Register data to mortgage drawdown data from the Banking and Payments Federation Ireland during the opening half 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 half of 2017 was 43%.
Owner occupier levels remained strong during the opening half of the year, accounting for 73% 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 nine months of 2018, reveals a continued outflow of investors from the buy to let market. Reflecting the trends of recent years, 35% of vendors were selling their investment properties, while investors entering the market represented only 18% 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; “The residential market remains very challenged with real demand still outpacing supply. This is particularly evident in the rental market with current rents up to 20% ahead of the previous peak, and yet there is still a net outflow of private investors from the market. It is vital that this issue is addressed in the forthcoming Budget, if we are to achieve real stability in the residential market.”
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.
