House prices in Ireland decline for first time since 2012

Prices down 1.2 per cent during 2019 with average cost of a home now totalling €250,766, according to Daft

Housing prices in Ireland fell this year for the first time since 2012, according to a new report from Daft.

The property website’s latest survey shows prices fell 1.2 per cent during 2019, with the average cost of a house (including apartments) in the final three months of the year coming to €250,766. This marks a 2.4 per cent decline on the third quarter.

In the capital, residential property prices were down 1.2 per cent on an annual basis to €366,153, led by a 4.1 per cent year-on-year decline in south county Dublin to €566,776.

Outside of Dublin, most cities saw a rise in prices with an 0.8 per cent increase to €278,021 in Cork, a 2.9 per cent jump to €199,911 in Limerick and a 3.3 per cent gain to €180,650 in Waterford. Average prices in Galway were unchanged at €290,449.

Outside cities, prices were also in decline, with a 0.8 per cent annual retreat recorded in Munster and a 2.6 drop in Connacht and Ulster.

For the second quarter in a row, prices fell the most in Munster – down 4.7 per cent in the October to December period – undoing a large increase in average list prices seen in the first half of 2019.

Peak

Compared to their highest peak in 2007, prices nationally remain 32 per cent lower.

"There appears to be a relatively good balance between the pipeline of newly built owner-occupied housing and the number of households able to buy that housing, given constraints such as the mortgage rules. Where falling prices represent the ability of developers to build new homes for less, this fall is good for the country's competitiveness," said Ronan Lyons, assistant professor of economics at Trinity College Dublin, who compiled the report.

The number of properties available to buy on the market nationwide was just under 22,500 in December, down almost 5 per cent year-on-year. This marks the fourth month where stock has declined with falls recorded in almost all parts of the country.

Overall, there were nearly 69,000 properties listed for sale during 2019, up from 52,000 in 2016 and just 33,000 in 2012.

In Dublin, there were 4,300 properties for sale during December, down 10 per cent on the same month a year earlier and the lowest total in 18 months.

The latest report shows there were about 10,000 residential property sales involving newly built homes this year, on a par with 2018 and up from fewer than 3,000 in 2012.

In the capital, some 8,500 transactions were for newly built homes in 2019, down from 10,400 last year.

“The sales market looks, by and large, in balance. At least it looks in balance given the mortgage rules, which were introduced precisely to avoid a repeat of the 1995-2012 bubble-crash episode. In that sense, slightly falling sale prices reflects greater affordability and, if housebuilders are becoming more efficient, greater viability,” said Mr Lyons

It is the rental market – home to almost a third of all households in the State – that was now the focus of Ireland’s housing issues as we head into a new decade, he said.

Charlie Taylor

Charlie Taylor

Charlie Taylor is a former Irish Times business journalist