Property prices are now rising by just 0.9 per cent, the lowest level of increase in almost 12 years, as the pick-up in housing supply continues to cool the market.
The latest official figures from the Central Statistics Office (CSO) show prices in Dublin, which has seen the largest increase in residential construction, actually dropped 1.5 per cent in the 12 months to October. Prices were down 7.1 per cent in Dún Laoghaire-Rathdown, which is traditionally seen as a bellwether for the market.
That compares to a 1.3 per cent fall in Dublin in the year to September and an almost 7 per cent fall in Dún Laoghaire-Rathdown in the same period, an indication that the fall in prices has sharpened.
The rise in property prices is the lowest since December 2007, a point followed by severe drops as the recession hit. The next lowest rise was seen in June 2013, from when prices have consistently increased.
The figures come after the Economic and Social Research Institute (ESRI) said earlier this week that “prices are as high as they can possibly go given affordability in the domestic economy”. The institute added that the cost of supply is one factor that needed to be addressed.
The Construction Industry Federation noted on Thursday that 41 per cent of the cost of delivering an apartment was related to costs such as taxes, levies, the cost of finance and land costs.
It said that "unless some of these costs are reduced, development finance is more accessible and the delivery schedule of utilities are aligned with housebuilding, the industry will continue to struggle to increase output to 34,000 per annum", a figure that emerged from Central Bank of Ireland research this week as an optimum level for the coming decade.
Thursday’s figures indicate that property prices are still almost 17 per cent off their State-wide peak in 2007. Prices have risen 94.9 per cent in Dublin from their February 2012 low, and 83.8 per cent in the rest of Ireland from their May 2013 trough.
The slowdown in price growth comes amid an increase in purchases. In October, 4,428 property purchases were filed with Revenue, a 7.1 per cent increase on the same month last year. Existing properties accounted for almost 82 per cent of purchases.
The median, or typical, price for a home in the month was €256,000 across the State, with Dublin median at €368,000. Dún Laoghaire-Rathdown had the highest median price of €525,000, while South Dublin had the lowest in the county at €342,000. Outside Dublin, Wicklow had the highest median (€325,000), while Leitrim had the lowest at €107,500.
By Eircode, Blackrock in Co Dublin had the highest median prices at €600,000, while Clones, Co Monaghan, had the lowest at €75,000.
When Dublin is excluded, property prices across the State rose 3.3 per cent in October, with house prices up 3.3 per cent and apartment prices up 4 per cent.
The overall growth outside Dublin is also slowing, evidenced by prices rising 3.6 per cent in the year to September.
The region outside Dublin that witnessed the largest rise was the Border (10.1 per cent), while at the other end of the scale the mid-east saw no change in prices.
Economist Alan McQuaid said that price growth was likely to remain “fairly muted” into 2020, “with the biggest price rises coming from outside the capital”.