House prices fall slightly in Dublin city as interest rates and energy costs bite

Rising interest rates and higher energy costs have combined to cause the average price of a three-bed semi-detached house in Dublin city to fall for the first time in three years, according to the latest data from an index maintained by the REA real estate group.

Nationally, the price of a three-bed semi-detached house rose by 0.36 per cent during the last quarter of the year, to €291,667. This brings the annual price increase to 8 per cent.

The forth-quarter figures from the REA Average House Price Index show house prices in Dublin fell by -0.34 per cent in the period.

The index is based on the sale price of three-bed semis and is used to produce a picture of the second-hand property market in towns and cities countrywide.

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Time taken to reach sale agreed has risen steadily from mid-year in Dublin and now stands at six weeks as REA agents reported a “less frenzied” approach to viewing and buying, as well as a slowdown in bank funding turnaround times, the group said.

‘Frenetic start’

“Following a frenetic start to the year, the market has slowed somewhat, with affordability having a definite effect on demand,” said REA spokesperson Barry McDonald.

“This is illustrated by Dublin’s postcode districts, where prices average €495,833, seeing a slight fallback on its end-September figure for the first time since 2019.

“However, north county Dublin, where the average sale is €416,670, saw a small rise of 0.4 per cent, with agents REA Grimes reporting that homes which are priced correctly are attracting multiple bidders.”

“We are still seeing a lot of investors selling their properties and there is a feeling that more landlords may put their properties on the market once the ban on evictions is lifted in March,” he said.

First-time buyers now make up 61 per cent of the market, according to REA, a rise of 3 per cent since September. The figure rises to 73 per cent in Dublin.

Sharpest falls

The counties that saw the largest percentage increases in average sale prices were Sligo at 6.8 per cent (€195,000), Galway county at 4.8 per cent (€220,000), and Longford at 4.4 per cent (€165,000).

The counties that saw the sharpest falls were Mayo at -2.6 per cent (€190,000), Kerry at -2.5 per cent (€292,500), and Wicklow at -1.1 per cent (360,000).

The most expensive average sale prices recorded were for Dublin city (€495,833), south county Dublin (€475,000), and north county Dublin (€416,670). The least expensive average sale prices were recorded for Donegal (€145,000), Longford (€165,000) and Cavan (€168,000).

Cork city prices increased by 1.4 per cent to €355,000 in the past quarter, with 40 per cent of homes being sold to first-time buyers.

Limerick city saw prices increase by 1.9 per cent to €270,000, and Galway city recorded a 0.3 per cent increase to €311,000. Houses in Galway city increased in price by more than 24 per cent in the past 12 months from €178,000 to €220,000, the largest annual increase in the country, according to the index.