The latest property price report has revealed a downward trend in values. But the authors have stressed that this doesn’t signal a coming collapse.
MyHome.ie’s data showed that asking prices dropped by 0.3% in the first quarter of 2021, though they are still 3.2% higher than the same time last year. A 6% gap between the asking price and the sale price recorded in 2020 has narrowed to just 1%.
In Dublin, prices have decreased for 4 consecutive months, currently 2% lower than the peak level observed in September 2020. The report’s authors argued that multiple mitigating factors, such as decreased expectations for future ECB rate increases and the Central Bank’s new lending rules, as well as continued demand, will discourage a freefall in prices.
The January average price of a Dublin home was nine times the average income, which is almost double what is allowed to be borrowed under the Central Bank’s loan limit. Davy Stockbrokers economist Conall Mac Coille forecasts that the annual asking price inflation will reach 1.5% this year.
The median asking price for a home across the country is now €310,000, whereas in Dublin it stands at €395,000, a 0.8% and 0.6% decline respectively in the last quarter. In contrast, prices in areas outside Dublin have risen by 0.2% in the quarter and 5% in the last year, with the median asking price at €265,000.
MyHome.ie’s report also stated that the market is experiencing a correction caused by extended valuations, and that the slowdown in asking price inflation continued in the first quarter. What’s more, the Banking and Payments Federation Ireland report revealed that first-time buyers are borrowing more, thanks to the Central Bank’s decision to relax its lending rules. In February 2021, the average mortgage approval for first-time buyers set a fresh record of €281,350.
The number of properties available on MyHome.ie in the first three months of 2021 (13,600) still remains significantly lower than the pre-pandemic figure (20,000). Mr. Mac Coille stated that the data suggests the pandemic-era valuations are cooling, though the Central Bank’s loosening of the mortgage lending rules could lead to an increase in house prices in the future.
