Dublin house prices rise by an average of €155,000 since 2012

Daft report also shows that the number who think houses are good value has hit a record low

House prices in Dublin have risen by an average of almost €155,000 above their low-point in 2012,  new figures show.  File photograph: Cyril Byrne/The Irish Times

House prices in Dublin have risen by an average of almost €155,000 above their low-point in 2012, new figures show. File photograph: Cyril Byrne/The Irish Times

 

House prices in Dublin have risen by an average of almost €155,000 (70 per cent) above their low-point in 2012, while the average asking price for houses across the State has risen by more than 54 per cent, figures in a new report show.

The latest Daft.ie house price report states that the number of Irish people who believe house prices represent good value for money has fallen to its lowest level on record.

It also says that for the first time this decade the typical housebuyer in Dublin is planning to spend more than five times their income on a home.

The report, which analyses trends in the Irish residential sales market for the second quarter of the year, says that the number of people who believe prices now represent good value has fallen to just 24 per cent nationwide, the lowest figure on record.

In Dublin, just one in six respondents sees value in the market currently – the eighth quarter in a row where 15 per cent or fewer saw value in the capital.

The price-to-income ratio when planning to buy was 4.6 among survey respondents, the second highest reading since the Daft series started in 2011.

The ratio in Dublin is even higher, with the typical respondent planning to buy a house worth more than five times their income.

Nationally, the average asking price reached its lowest point in the third quarter of 2013. This has risen 54.4 per cent – or almost €89,000 – since then.

In Dublin, prices reached their lowest point in the second quarter of 2012 and have risen by an average of 70 per cent – or nearly €155,000 – since then.

The increase in prices has been smallest in Co Donegal, where prices bottomed out in early 2014. Prices rose by 22 per cent between then and the Brexit referendum in mid-2016, but have risen by just 5 per cent in the following two years and are lower now than where they were a year ago, making the county the only part of the State where this is true.

The expected inflation in house prices over the coming 12 months currently stands at 5.3 per cent nationally, down from 5.7 per cent a year ago.

In Dublin, expected inflation over the coming 12 months is now 6.7 per cent, down from a peak of 8.4 per cent a year ago.

Brexit threat

Daft.ie economist Ronan Lyons said prices in Co Donegal have been negatively affected by the UK’s impending exit from the European Union. “Brexit continues to kill confidence in much of the market there,” he said.

Speaking of prices generally, he said the picture was “slowly changing”.

“Compared to a year ago, prices are just 5.6 per cent higher,” he said. “Granted, this is well ahead of inflation, which is – give or take – zero. But 5.6 per cent is the lowest rate of inflation we’ve seen nationally in over four years, since the first quarter of 2014.

“And that was when inflation was on the way up, not the way down. The quarter before this, late 2013, annual inflation was 0.3 per cent and three months later it was 9.8 per cent.

“The last time we saw a similar set of circumstances – inflation close to 5 per cent and falling – was actually over a decade ago, in the middle of 2007. We know what happened next then. This time around, almost no one expects anything similar.”

Mr Lyons said the slowdown in inflation on this occasion could be attributed to “more ordinary” factors such as supply and demand, with supply “slowly but surely coming on stream”.

The total stock available for sale in Dublin in June was just shy of 4,800.

Together with the same time of year in 2015, this represents the highest availability since prices bottomed out.

Outside Dublin, the total number of homes available to buy on the market reached a low of 16,800 in March this year – down from a high of almost 57,000 in mid-2009. However, there has been a jump in availability in the last three months, from 16,800 to 18,800.

For Dublin, housing completion figures show that 15,200 new homes were finished in the 12 months to March. This is more than three times the number of homes completed during 2014.