Dublin Home Prices Dip in Q3, Suburban Markets Rise

---

According to the latest House Price Report released this week by Daft.ie, home prices rose rapidly outside Dublin but fell in the capital between June and September 2015.

During that three-month period, the average asking price in Dublin fell by 1.4%, only the second fall in over three years. Outside the capital, however, the average asking price rose strongly, climbing by 3.9%. The national average asking price in the third quarter of 2015 was just over €205,000, this compared with just under €190,000 a year ago and €164,000 at its lowest point in early 2013.

While prices in Dublin fell, prices in other cities rose strongly for the third quarter in a row. In Cork, prices rose by 6.8%, while in both Galway and Waterford cities there was a 7.2% increase in just three months. The largest increase was in Limerick city, which saw a 7.7% increase in prices between June and September. Outside the major cities prices were up 3.5% during the same period.

This means that year-on-year inflation in the capital has slowed dramatically over the last year, from 24.5% in third quarter of 2014 to just 2.4% in the same period in 2015. This occurred at a time when there was a substantial increase in house price inflation elsewhere, both in the other cities (from 10.5% to 17.9%) and outside the cities (from 8.4% to 12.5%). Analysis of Property Price Register transactions reveals very similar trends, with annual inflation in Dublin (at 2.6%) well below other cities (17.7%) and the rest of the country (15.7%).

Daft.ie president Ronan Lyons commented, "The latest figures confirm that the Central Bank borrowing rules have had a dramatic impact on house price inflation in the dearest parts of the country. In year-on-year terms, house prices are now falling in Dublin 6, Dublin 14 and Dublin 18, while in other expensive markets - such as Dublin 4, Dublin 6W and South County Dublin, they are effectively static. This immediate cooling of the market is to be welcomed, although a side-effect of the income caps is a shift in demand elsewhere in the country.

This is seen clearly in Dublin's Commuter Counties, where house prices have risen 14% over the last 12 months as they have stabilized in Dublin. In Ireland's other cities, where year-on-year inflation is at 18%, this is arguably Central Bank income caps acting as a target, rather than a constraint."

Year-on-year change in asking prices - major cities, Q3 2015

• Dublin City:  €306,540 - up 2.4%
• Cork City: €225,361 - up 19.1%
• Galway City: €222,616 - up 18.1%
• Limerick City: €143,929 - up 17.3%
• Waterford City: €126,688 - up 12.0%