Property price growth slows in May as transactions plunge

Some 46% fewer transactions took place in May than in same month last year

Residential property prices rose 0.3 per cent across the State in the 12 months to the end of May while prices in Dublin were unchanged, according to the Central Statistics Office (CSO).

Prices continue to slow with growth in May less than half the 0.7 per cent annualised rise in April.

Dublin saw significant growth in certain areas and declines in others. In Fingal, prices rose 2.2 per cent while south Dublin saw prices decline 1.3 per cent.

Outside of Dublin, the region with the largest rise in house prices was the southwest, with a 4.3 per cent gain. Prices in the southeast, however, fell 0.8 per cent.

While home prices have rebounded substantially from their post-financial crisis lows, they still remain 18.1 per cent off the 2007 peak, with prices in Dublin over 22 per cent lower.

The Government-imposed lockdown clearly had an effect on home sales, with just 1,937 purchases filed with Revenue in May, down 46 per cent on the same month last year and a 17.6 per cent fall compared to April. The total value of transactions filed in May was €535 million.

Existing dwellings accounted for 1,701 of the purchases filed in May, a fall of almost 42 per cent. New home sales were 65 per cent lower on May 2019.

First-time buyers

In the five months to the end of May, almost a third of the 43,127 property purchases were made by first-time buyers owner occupiers, while movers accounted for 53 per cent.

KBC Bank Ireland chief economist Austin Hughes said the fall in transactions points to a problematic outlook.

“With property price register data suggesting an even sharper year-on-year drop in sales in June, this also forcefully suggests the major impact of the pandemic on the Irish property market in 2020 is likely to be seen primarily in the form of depressed activity levels rather than dramatically lower prices.

“That said, historic relationships between Irish house prices and key drivers such as employment and incomes continue to point towards the risk of some weakening in property values as 2020 progresses.”

The median price of homes in the State was €260,000 in the 12 months to May while Dublin had the highest median price of €370,001. Within Dublin, the highest median price of €525,000 was in Dún Laoghaire-Rathdown while the lowest was in south Dublin at €347,500.

Outside Dublin, the highest median prices were in Wicklow (€330,392) and Kildare (€310,000), while the lowest price was €105,000 in Leitrim.

By eircode, Blackrock in Co Dublin had the highest median price for a residential home at €615,000 while the least expensive eircode was Castlerea in Co Roscommon where the median price of a home was €79,000.

Peter Hamilton

Peter Hamilton

Peter Hamilton is a contributor to The Irish Times specialising in business