House price inflation has slowed for the first time in nearly two years, a sign perhaps that the ongoing cost-of-living contraction may be holding back demand. According to the latest residential property price index, property prices nationwide rose 14.2 percent for the year to April, up from a 15.1 percent rate in March.
In Dublin, residential prices increased by 11.5%, up from 12.7% in March, while property prices outside Dublin increased by 16.4% year-on-year.
The latest data also shows that real estate transactions fell 12 percent to 3,138 in April, another sign of cooling in the market, while the total value of transactions in April amounted to 1.1 billion euros.
Prior to April, price growth in the state’s housing market had risen almost continuously since the start of the pandemic, fueled by factors such as increased savings, remote work and lower-than-anticipated supply. However, cost-of-living issues combined with the prospect of higher interest rates (the European Central Bank signaled earlier this month that it would start raising rates next month) are expected to see a significant moderation in growth. Of the prices.
The Central Statistics Office said property prices in Dublin were now 10.2 per cent lower than their February 2007 peak, while residential property prices in the rest of the state were 3.2 per cent lower. percent lower than its May 2007 peak.
The latest figures show that the average price paid for a home in the Republic in the 12 months to April was €334,722. The median price paid in Dublin (€512,502) was the highest of any region or county. Dún Laoghaire-Rathdown had the highest average price in the Dublin region at €713,514, while South Dublin had the lowest at €407,734.
The Border region was the least expensive region for the year through April 2022, with an average price of €176,488. Longford (in the Midland region) was the least expensive county, with an average price of €151,558.
“While price growth is still much higher than it was before the pandemic, we are now comfortable saying that house price inflation has passed the peak of the cycle,” Goodbody Stockbrokers said. “Rising cost of living and higher mortgage rates suggest a further slowdown is expected in the coming months. However, supply shortages remain acute, limiting the scope for weaker price dynamics in coming quarters despite growing domestic and international risks,” he added.
KBC Bank Ireland economist Austin Hughes said: “Monthly house price movements may be choppy, but data for April suggests we may be seeing the start of a move towards a material slowdown in home price inflation. House prices in Ireland”.
Hughes, however, noted that the median price paid for a home nationally in April (just under €335,000) was 7.4 times the median salary (€45,000).
Irish Mortgage Advisors Association chairman Trevor Grant said prospective homeowners are understandably concerned that property values could fall in the near future, “but that doesn’t seem likely considering demand continues to outstrip supply. ”.
“Supply is steadily increasing, which should ease property price growth, but on the other hand, the rising cost of raw materials and rising labor costs may continue to increase upward price pressures.” , said.
“Prospective homebuyers are looking to find out if they should move now or wait, hoping prices will come down. Nobody can say with any degree of certainty what will happen to prices, but there definitely seems to be room for further increases, so if you’re in a position to buy now, and in particular if you’re currently renting, then you’d better go ahead with your plans,” he said.