Property price growth slows in final months of 2018

Home prices increase by 6.5% in December, down from 7.1% in November

“First-time buyers continue to be priced out of the market,” Cantor Fitzgerald’s Alan McQuaid says. Photograph: iStock

“First-time buyers continue to be priced out of the market,” Cantor Fitzgerald’s Alan McQuaid says. Photograph: iStock

 

Property prices rose 6.5 per cent in 2018, new figures from the Central Statistics Office showed, continuing the trend for slowing growth seen in the final months of the year.

In Dublin, the Residential Property Price Index showed prices rose by 3.8 per cent over the year, with house prices faring better than apartments, which grew by 4.2 per cent and 2.9 per cent respectively.

Excluding Dublin, property prices were 9.6 per cent higher for the year, with houses up 8.8 per cent and apartments almost double that at 16.9 per cent. The mid-west region showed the largest jump, with property prices there increasing 18.7 per cent. The Border area showed the slowest growth at 4.8 per cent.

Despite the increases, the national index is still 18 per cent off the peak recorded in 2007, with Dublin prices down 21.4 per cent and the rest of the country 22 per cent lower. The lowest point for the national market was early 2013.

The RPPI is based on Revenue stamp duty returns and can be revised due to the 44-day submission deadline, which means only some of the two most recent months’ residential property transactions are available for the compilation of the index in the following month.

Key issue

Cantor Fitzgerald’s Alan McQuaid said supply continued to be the key issue, with new supply still not enough to satisfy demand in the short to medium term. “First-time buyers continue to be priced out of the market. Subsidising purchasers through tax breaks is not the answer. But at least, new supply is coming on stream. Last year a total of 18,072 new dwellings were completed, a 25 per cent increase on 2017, and this is forecast to rise to around 23,000 in 2019, but still below the estimated figure of 35,000 per annum needed to meet demand in the short-to medium-term,” he wrote in a note.

“As such, it is a case of trying to be patient. However, as we wait for more houses to be built, residential property prices will continue to rise, although there is now clear evidence that house price growth has started to ease, especially in Dublin.”

House-price growth is set to remain in positive territory on a year-on-year basis for a while yet, Mr McQuaid said. “The biggest rise is likely to come from outside the capital, with the asking price for houses in more expensive areas increasing at a slower rate,” he said.