Irish House Price Inflation Continues to Slow and Why this is a Good Thing

County Analysis : Two Bedroom Apartment 

With affordability increasingly stretched and the period of catch-up coming to an end in many counties, cheaper two-bedroom apartment prices are still seeing rapid gains across Ireland.  In Dublin, median prices are up 4% to €260,000, 3% in Kildare to €175,000, 10% in Meath to €170,000 and 1% in Wicklow to €250,000.  

Eleven of the 26 counties have seen double-digit increases in asking prices over the last 12 months.  These include:  Carlow (21%), Cavan (22%) Donegal (25%), Laois (13%), Limerick (13%), Offaly (17%), Sligo (27%), Tipperary (14%) and Waterford (15%).

County Analysis:  4 Bedroom Semi-Detached 

At the upper end of the Market, especially in urban areas, four-bedroom Semi-Detached house price gains are clearly cooling.  The median price in Dublin was €470,000, up 4% on the year.  In Kildare, prices are up 1.8% but are down 2.8% in Meath. 

One year ago, nine counties were seeing double-digit annual gains, but that figure has now slipped to just three.  Leitrim (25%), Limerick (16%) and Wicklow (18%) saw the fastest price gains to €125,000, €260,000 and €435,000 respectively.  However, prices have fallen over the past 12 months in several counties – Carlow (-2.5%), Donegal (-6.2%), Kerry (-4.1%) and Louth (-2%). 

These trends together with strict Central Bank lending rules are helping to bring stability to a volatile market.  The price-income multiple is a standard measure of affordability worldwide.  In the days before property became a fast moving financial asset an affordable home for a worker was considered to be three to four times their income.  The Central Banks mortgage restrictions, which limit people to borrowing three and a half times their income, reflect this.  

The latest figures show headline property-price inflation has cooled significantly in the past year.  In Dublin, the slowdown has been even more pronounced with prices rising just 0.6% in the year to May.  The annual rate of inflation in the capital had been negative in April.  

All of the above are a good indicator of where the market is at at the moment and why a levelling in prices may be good.  

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