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House prices in the village of Ballyboughal, in north Co Dublin, have dropped by up to 30%.
# sales jogjam
Rents are getting so high that there's "little chance" of saving for a house
Estate agents are saying the Central Bank rules have “exceeded their desired effect”.
THE SALE PRICE of houses across Dublin is dropping sharply as a result of new mortgage deposit rules according to a new survey.
Research by the Real Estate Alliance (REA) shows that the sale price of a three-bedroom semi-detached house in Dublin has fallen by €5,000 in the last three months, from €339,500 to €334,500.
In south county Dublin the fall has been even sharper, with an average of €15,000 wiped off the sale price of an average three-bedroom semi.
The situation in Dublin is different from that across the rest of the country which is still seeing price rises. Because of this, the national picture across Ireland shows that the average price for a three-bedroomed house is now €188,102, compared to €186,968 at the end of June.
The estate agent group says that the sale prices falling across Dublin is due to a sales “jogjam” caused by two separate but connected issues.
The group argues that spiralling rental prices are stopping couples from saving for deposits following the introduction of the Central Bank’s mortgage deposit rules.
Under the new rules introduced in January borrowers are expected to arrive to market with at least a 20% deposit saved for the value of the house they hope to buy. For first-time buyers the rules are slightly more lax, with just 10% of the first €220,000 required, and 20% thereafter.
REA chief executive Philip Farrell says that they feel the Central Bank needs to take another look at their rules because of the effect they are having.
“Our agents on the ground in Dublin are reporting a growing withdrawal of couples aged between 25-40 from the market due to the new mortgage deposit regulations,” he says.
“When the Central Bank introduced the new rules, they stated that they could revisit them, and we believe that they need to do so as a matter of urgency. We believe that the new borrowing requirements are exceeding their desired effect and are now starting to prevent the market from functioning in a cohesive manner.”
One of the group’s agents at Tallaght-based REA McGee says that the average price in the locality is now €220,000.
“A typical couple are now being expected to pay rent of €1,200 a month on a two-bed apartment in Tallaght,” explains estate agent Anthony McGee.
“When you combine this massive rent with childcare and other expenses, there is very little chance that people will then save the 10/20% deposit required on a property.”
Read: People are suddenly being asked to pay a lot more for houses outside Dublin >
Read: Asking prices for Dublin houses have fallen for the first time in almost 3 years >
