House price inflation slowed last month as demand for homes fell, prompting speculation that uncertainty is making buyers cautious about bidding for properties.
Prices rose 3 per cent in the year to September, about half the rate of inflation a year earlier, according to a report from property website Daft.ie.
The average Irish home sold for just short of €445,000 in the three months to the end of September, the report says, while the price at which houses were listed was 44 per cent above pre-Covid pandemic levels.
The prospect of interest rate hikes and the global uncertainty sparked by the US-Iran war could be making buyers more cautious about what they offer for homes, the report’s author, Trinity College Dublin economist Ronan Lyons, said on Sunday.
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Demand for homes appears to be easing, but supply has not increased, Lyons said, with Daft.ie’s figures showing that buyers are reining in what they offer for properties.
A year ago, he said, people bid between 6 and 7 per cent more than a home’s listed price when trying to buy a property, but this has now fallen to between 2 and 3 per cent.
Lyons said it was not possible to say if the trend would continue or if it was a more short-term pattern.
However, a fall in employment in key industries that generate foreign earnings could ease house price inflation in the longer run, he said. “Otherwise, it could just be that people are taking stock.”
Homes are also taking longer to sell, with the number of properties taken off the market down by 3 per cent in the year to August.
While demand for new properties increased slightly outside Dublin, sales of new and second-hand homes fell in the capital. “That is the clearest sign of genuinely softer demand and a signal to watch in the coming quarters,” Lyons said.
The report shows that the number of homes for sale in the Republic has not increased. On September 1st, close to 13,800 second-hand houses were for sale, up 12.5 per cent on a year previously, but still around half the pre-Covid average.
Close to 52,700 second-hand homes were put on the market in the year to August, the same as last year and in 2024, the figures show.
In the three months to the end of September, the average three-bedroom semidetached home sold for €635,000 in Dublin – 2.7 per cent more than during the same period last year.
In Cork, the same type of property sold for €431,000 – an increase of 5.7 per cent. Prices in Galway rose 5.8 per cent to €618,000, in Limerick they increased 5.8 per cent to €376,000, and they surged 11 per cent in Waterford to €313,000.
