Dublin house prices fall at sharpest rate in three years

Higher mortgage costs are continuing to take the heat out of the property market with prices rising at an annualised rate of just 1.5 per cent in July.

This was the lowest level of price growth recorded in almost three years and comes on the back nine straight interest rate hikes from the European Central Bank (ECB).

The latest residential property price index from the Central Statistics Office (CSO) indicated that prices in Dublin fell year on year by 1.4 per cent in July, the sharpest rate of decline reported since November 2020.

This was also the third straight month that prices in the capital fell on an annualised basis and one of the clearest signs yet that higher mortgage costs are pricing potential buyers out of the market.

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Prices outside Dublin continued to rise at an annual rate of 3.8 per cent. On a monthly basis, prices nationally rose by 0.3 per cent.

The latest index indicated that the volume of transactions by households fell by 6.1 per cent to 4,174 in July compared with the same month last year. However, transactions were up by 3.7 per cent on the previous month.

Households paid a median or middle price of €320,000 for a home in the 12 months to July, according to the CSO.

The Dublin region had the highest median price (€436,445) in the year to July. Within the Dublin region, Dún Laoghaire-Rathdown had the highest median price (€630,000), while Fingal and South Dublin had the lowest (€410,000).

The highest median prices outside of Dublin were in Wicklow (€420,000) and Kildare (€382,000), while the lowest price was €160,000 in Longford. The most expensive Eircode area was A94 ‘Blackrock’ with a median price of €735,000, while F35 ‘Ballyhaunis’ in Co Mayo had the least expensive price of €127,500.

Ipav, the Institute of Professional Auctioneers and Valuers, said “the heat of 12 months ago has left the market”.

“Rapidly rising interest rates are having only minimal effect so far on house prices, and that is largely because those on average wages, who would have been the typical buyer traditionally, have already been locked out of the market,” Ipav chief executive Pat Davitt said.

“With the exception of the help-to-buy and the first-home scheme such prospective buyers have found themselves chasing an ever-shifting target, from over-zealous mortgage rules initially and now high interest rates and diminishing lending competition,” he said.

Mr Davitt also welcomed the entry of the credit union movement to the mortgage market.

“The Government is aware, clearly, that the current housing plan needs to be updated, given the large numbers of people now locked out of the market,” he said.

And he said it would be important that next month’s budget contains “meaningful and impactful” measures.

Mr Davitt said home ownership needs to be promoted with a whole new policy emphasis, given the “seismic” demographic changes under way.

Also responding to the latest figures was Ian Lawlor of Lotus Investment Group, who said “the unwavering demand for housing continues to influence the market, driven by factors such as population growth and housing shortages”.

“This suggests resilience in the market, leading many analysts to anticipate that prices will find equilibrium and stabilise at their current levels,” he said.