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The cost of buying a home in Ireland has flatlined - the average price for a house is now €267,000

The asking price for new sales nationally is around €267,000, while the price in Dublin is €374,000.

Image: RollingNews.ie

THE ANNUAL RATE of inflation of house prices in Ireland has fallen to less than 1% with the cost of buying a house in the capital did not increase at all, according to the latest house price report from MyHome.ie.

The report, which is published in association with Davy, found that asking price inflation slowed to 0.72% nationwide. 

This means the asking price for new sales nationally is around €267,000, while the price in Dublin is €374,000. Newly-listed properties are seen as the most reliable indicator of future price movements.

Conall MacCoille, Chief Economist at Davy, said that the slowdown in-house price inflation was to be welcomed and was inevitable given stretched affordability.

MacCoille, who authored the report, said: “Central Bank rules have stopped first-time buyers taking out too much mortgage debt and should lead to more realistic asking prices.

“Our analysis shows that the average residential transaction in Ireland (€292,000) is now 6.8 times the average income of €43,000. This is only slightly below the UK’s ratio of 7x. This is the first time since 2012 that Ireland’s house-price-to-income ratio has declined.

“While there has been a 13% fall in new instructions to sell and an 11% drop in the total number of homes listed for sale, there are positives in the market. Mortgage lending to first-time buyers is up 15% in the first three quarters and transaction volumes in the €300,000-€400,000 price range are up 7% in the capital,” he said.

“It is also encouraging to see homebuilding completions rose above 20,000 for the first time in the 12 months to September, and housing starts went above 26,000.”

In December, the Central Bank announced that is leaving its current mortgage lending rules as is after its annual review. 

The Central Bank’s governor Gabriel Makhlouf said that the current rules are working and that they will not be changed for the coming year. 

First-time-buyers need to have a minimum deposit of 10% of the value of the property, second and subsequent buyers need to have a minimum deposit of 20% and buy-to-let buyers need to have a minimum deposit of 30%. This is what’s known as loan-to-value limits.

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