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Dublin apartment prices are up 35% in a year, but the house market is finally starting to cool
Most of buyers’ ‘mattress money’ that was built up during the boom years is gone.
DUBLIN APARTMENT PRICES went up 35% over the last two months, but price rises for houses in the capital may finally be starting to slow down.
The September residential property index, released today by the Central Statistics Office (CSO), showed property prices across the country went rose another 1.8% last month.
Propery prices are now up 15% over the past 12 months with big increases in Dublin driving much of the growth.
Apartment prices in the capital are up over 35% for the past year, while house prices increased 22.6% during the same period.
Outside Dublin, house prices have gone up 7.3% since the same month in 2013.
But the CSO noted overall prices in the city were still nearly 38% off their peaks from early 2007 and Dublin apartments were over 44% below their highest going rates.
The yearly increase in Dublin house prices was the lowest annual figure since May.
The start of a ‘new phase’?
Real estate firm Savills Ireland said slowing growth in Dublin house prices could be the start of a new phase during which the market started to cool off, while Davy Research analysts agreed price inflation could be close to its peak.
Savills research director John McCarthy said the overall growth rate was still high but there were several factors working to slow prices rises down.
He said there were fewer cash sales because boom-time “mattress money” had been spent and tighter lending rules would also put the brakes on demand.
The Central Bank is introducing new rules next year on the amount people can borrow, which will generally be capped at 3.5 times their annual earnings and 80% of the total property value.
“The proposed lending restrictions will undoubtedly impact on affordability and this is likely to drive buyers further afield in the search of affordable properties,” McCarthy said.
Prices have started to pick up outside Dublin and Savills said these rises would continue if homebuyers were locked out of the capital’s market because of the lending caps.
The average Dublin homebuyer would need a deposit of €70,000 under the rules and this could potentially put a limit on prices despite chronic shortages of property in the city.
READ: Number of properties on the market ‘at lowest level’ since 2007? >
READ: New figures showing surge in house prices welcomed by the Government >
