House prices in Dublin up 8.8% over past year

Property advisor DNG says average price of a resale property in the capital now €509,575

The average price of a resale residential property in Dublin rose 8.8 per cent in the first quarter when compared with the same period last year, according to property advisor DNG.

The group’s latest house price gauge suggests strong demand and a low level of available stock on the market served to drive prices higher.

The rate of growth represented a slight moderation in the annual rate compared to the year to December when prices in the capital rose by 9.9 per cent. The average price of a resale property in the capital has increased by 2 per cent since the last quarter of 2021.

House price inflation remains elevated in the capital but the annual rate of growth in prices has stabilised.

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Prices in north Dublin showed the strongest rate of increase, increasing by 11.1 per cent on average whilst prices in south Dublin and west Dublin increase by 7.8 per cent and 7.9 per cent respectively over the same period.

The latest rise in prices means that the average price of a resale property in the capital now stands at €509,575 and has risen by 110 per cent since the market low point in 2012.

Buyer profiles

In addition, the DNG apartment price gauge recorded an increase in apartment prices of 1.9 per cent during the first quarter. On an annualised basis, apartment prices are now 6.7 per cent higher than a year previously.

An analysis of transactions and buyer profiles during the first quarter of the year shows that 90 per cent of property sales were agreed at or above the asking price, and, on average, achieved prices were 6.7 per cent above the asking price in the quarter.

First time buyers remained very active in the resale market, accounting for 50 per cent of purchases in the first quarter of the year, whilst 23 per cent of buyers were doing so to trade up in the market. Just 4 per cent of buyers were trading down in the market.

Two thirds (67 per cent) of buyers completed their purchases using mortgage finance whilst almost a quarter (23 per cent) of buyers relied on cash or other non-mortgage finance to complete their purchase.

Tight supply

DNG director of research Paul Murgatroyd said: “In terms of the capital’s residential property market, 2022 has carried on where 2021 left off, with the annual rate of house price inflation in the capital at an elevated but stable level of around 9 per cent.

“The picture of tight supply levels and robust demand continued to push prices higher in the capital in the first three months of the year and this is set to continue into to quarter two.”

DNG chief executive Keith Lowe said upward pressure on prices is “still evident” in the house price gauge results for quarter one, with agreed sale prices averaging 6.7 per cent above asking prices in the period.

He said this was “due to an excess of demand over the limited supply available, resulting in competitive bidding situations for properties currently on the market”.

“However, this is likely to be become more subdued as more property comes for sale and in the event that interest rates rise,” he continued.

“The fact that 25 per cent of all of DNG sales are investors leaving the rental market is a real concern for supply in that sector.

“To reverse this trend, the current tax regime for small to medium sized landlords needs to be reformed, as it is unintentionally making it economically unattractive and, in some cases, unviable for many investors to remain in the sector.

“We are also calling for the reintroduction of mortgage interest relief for first time buyers to assist them in purchasing, as without this, many potential first time buyers will be locked into rental accommodation for the long-term which will have serious future consequences.”

Colin Gleeson

Colin Gleeson

Colin Gleeson is an Irish Times reporter