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Growth in house prices slows to just 0.1% - but unclear if supply or Brexit is the cause

The average cost of a house nationwide in the third quarter of this year was €257,000.

Image: Shutterstock

GROWTH IN HOUSING prices has slowed to just 0.1%, according to the latest report by property website Daft.ie.

However, it is not yet clear whether weakening demand due to Brexit or an increase in supply is the cause.

The average cost of a house nationwide in the third quarter of this year was €257,000.

This is still 30% lower than peak house prices in 2007, but represents an increase of 57% from the housing market’s lowest point in 2013.

The report, which bases its analysis on data from properties posted on Daft.ie, found that annual house price inflation fell into negative territory in Dublin and is now 0.6% lower than at the same time in 2018.

Inflation also remained negative in Leinster (-1%) and Connacht-Ulster (-0.6%), but is positive in Munster (2.5%) and all major cities (3% in Cork and Galway, and 5% in Limerick and Waterford).

Ronan Lyons, economist at Trinity College Dublin and author of the report, said the figures will spark debate on whether the falling house prices in some areas are due to weakening demand led by Brexit or strengthening supply.

“Price falls are concentrated in the Greater Dublin Area,” Lyons said, “and, within that, in the most expensive markets.”

“These are the areas least exposed to Brexit and where new supply has been concentrated.

Therefore, it’s likely that cooling inflation is a good news story of supply doing its job, rather than a bad news story related to Brexit – at least for the moment. With prices also falling in some areas most exposed to Brexit, in particular Border regions, a disorderly Brexit could change this story in months to come.

The number of properties available nationwide remains largely uncharged, but regional differences – increases in Dublin and Leinster and decreases elsewhere.

The average price of a house in each city now stands at:

  • Dublin City: €373,509 – down 0.6%
  • Cork City: €281,251 – up 2.8%
  • Galway City: €296,610 – up 2.9%
  • Limerick City: €201,865 – up 5.5%
  • Waterford City: €181,395 – up 4.7%

About the author:

Nicky Ryan

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