Now that Brexit is signed and sealed – if not quite delivered – house prices look set to stabilise. That is the message in a report published exclusively in the Sunday Independent today.
Sales for the second half of last year indicate that prices nationwide are beginning to level off, and in some cases bounce back, after two years of falling values.
The report charts actual sales achieved rather than asking prices, and so is regarded as a good indicator of the state of the property market. It is compiled twice yearly by IPAV (the Institute of Professional Auctioneers and Valuers) across 41 local markets nationwide.
Still, it is early days. Uncertainty about the next government and the impact of election promises on first-time buyers may still put the market on pause, while Brexit trade negotiations could cause further hiccups in prices and in the willingness of home owners to sell.
Furthermore, the report shows prices continued to fall in 23 of the 41 areas surveyed nationwide, while 14 markets recorded price rises, and four saw prices level off.
Nonetheless, this is an improvement on figures for the first half of 2019 which recorded price falls in 27 local markets and price gains in 11.
The figures chart data across the three most popular types of housing – four-bed semis, three-bed semis and two-bed apartments – for the period July to end December 2019 compared to the first six months of last year.
Overall the average price of a house nationwide rose by just €80 to €263,686, a drop of 2.4pc since the end of 2018. That marginal increase masks a number of larger price drops and bounce-backs in local markets across the country.
Pat Davitt, chief executive of IPAV, says “it looks like the correction may be fizzling out”.
He attributes the levelling off in values to a return of certainty in the aftermath of Brexit. “It’s all about confidence in the market,” says Davitt. He also points out that until recently sellers’ expectations were unrealistically high. “Sellers who let the market decide the price of their house rather than deciding it themselves – those properties are selling and selling very well.”
Other experts believe that an increased supply of housing is helping to recalibrate the market.
Commuter belt Bounce back
Co Wicklow saw the strongest recovery across all house types, with four-beds rising by 8.29pc, showing the impact good rail links can have on demand for housing in coastal commuter towns such as Greystones and Wicklow. The average house price in the county now stands at €397,000, ranking 14th most expensive.
Two-bed apartments and three-bedroom units in the county bounced back by around 4pc, though apartments have not yet returned to their pre-2018 levels.
Carlow and Louth also saw large increases in prices across all house types, as buyers continued to be driven beyond the M50 in search of affordable housing – a three-bed in Carlow rose nearly 3pc to €175,000, well below the national average price, and in Louth by 7pc to €210,000.
Co Longford remained the cheapest place to buy, at an average price of €110,000.
Other commuter hotspots such as Meath, Offaly and Laois, however, saw price falls of up to 5pc. In Meath, where the price tag for a four-bed tipped a relatively pricey €307,500, there was a 4.5pc drop indicating that perhaps the point of affordability had been reached.
Nor were the increases uniform across house types, even within the same county. While Westmeath and Kilkenny both recorded a lift in values for three-beds, the price of four-beds fell.
Further afield, counties Sligo and Leitrim, traditionally among the cheapest places to buy, also saw rises of between 2-6pc.
Dublin still slow
Over the past two years, the dramatic drop in values for some Dublin areas has been big news and that trend continued in 11 of the 14 postal districts surveyed.
Prestige properties were worst hit with three-beds in D4 recording price drops over the last two years of almost 12pc – roughly €150,000 – the largest in the country. The latest report shows that the Embassy Belt continues to record falls of about 5pc for three-beds, but larger trophy homes with four-beds got a price lift, perhaps because they now represent relative bargains, or are being snapped up by high net worth Brexiles. Dublin 4 is still the most expensive spot to live in Ireland with an average price of €787,500.
Elsewhere, Dublin 15 recorded price drops of just under 5pc. The area has seen a number of housing schemes aimed at families come onstream and that increase in supply may have dampened down prices.
In the leafy streets of Dublin 6 there were more price drops across all types of housing, bringing the average value to €673,333. Nonetheless, it remains the second most expensive place in which to buy a home, a factor no doubt of its high number of private schools, family homes and easy access to public transport and shops.
Elsewhere in the city, Dublin 24, which includes Tallaght, Dublin 3, which includes upmarket Clontarf as well as Ballybough and East Wall, and north and south county Dublin all continued to see falling values, bringing the cost of a three-bed from anywhere to €552,000 in D3 to €290,000 in D24.
Dublin 1 and Dublin 7 saw prices flatline across all house types. A continued demand for two-bed apartments countrywide was noticeable with prices rising or levelling off in half of the areas surveyed.
Regional cities gain
The regional city of Galway and Cork county also showed price rises across all types of housing, with the average price of a three-bed at €267,500 and €215,000 respectively, while in Cork city only prices for three-beds showed a fall.
Market faces challenges
The demand for alternatives to the three- and four-bed family home continued to be strong – 20 markets showed price rises for apartments.
On the prospects for 2020, Davitt said: “December was a very good month and that rolled into the New Year. The market took off very well in 2020 which points to a hardening of pricing and probably more increases – certainly more than we’ve seen in this report.”
However, the market was still mired in difficulty. “Young people who would normally be buying their own homes are being forced to find alternatives, including living at home for longer.”
The IPAV Barometer identified the first slowdown in price increases in February 2018, and captured in September of that year, ahead of the CSO data, the first drop in Dublin values, followed by the slump in prices across the country in September of last year.
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