House prices begin to stabilise as more homes come on the market

The average house nationally is at €311,514

House prices begin to stabilise as more homes are put up for sale. Picture Colin Keegan, Collins Dublin

Conor Feehan

House prices have stabilised in the third quarter of the year, largely due to an increase in the number of homes being put on the market, the latest House Price Report has revealed.

While some price stability will be welcomed by people trying to get their feet on the property ladder, perceptions that the increase in supply is partly because landlords are fleeing the market means there could be increased pressure on renters as their pool of available properties dries up.

But a normalisation of the housing market post-Covid, where buyers can view homes in person and sellers place properties on the market on seeing more liquidity of supply, is also seen as a reason for increased price stability.

The average house listing price nationally now stands at €311,514, up from €287,704 last year, and €263,750 in 2020.

Nationally there was 0.1pc growth in average list prices in the third quarter of 2022, the ninth consecutive quarter of growth but also the smallest.

This meant prices nationally in the third quarter of 2022 were 7.7pc higher than the same period a year previously.

But list prices in the third quarter of the year were 0.7pc lower in Munster and 0.5pc lower in Connacht/Ulster, than in the second quarter, reversing the recent trend of strong price growth.

The number of properties available to buy nationally on September 1 was 15,461, up 22pc from the same period last year.

Across Dublin, listed prices did not change between June and September, down from a strong second quarter of growth in prices.

There were just over 4,000 homes for sale in Dublin on September 1, up 30pc from just above 3,100 on the same date a year ago.

Listed prices in Leinster (outside Dublin) rose by 1.1pc between the start of July and the end of September, the ninth consecutive quarter of growth, but a marked decrease from recent times.

The continued rise in prices in the region in the third quarter means that, compared to a year ago, prices in Leinster are now 7.6pc higher than a year previously.

Across Munster, listed prices dropped by an average of 0.7pc between June and September.

Annual price inflation in Munster now stands at 7.6pc, although it has cooled from a peak of 17pc in quarter one of 2021.

There were just over 4,100 properties on the market in Munster on September 1, up 8pc from 3,800 a year ago.

Across Connacht and Ulster, listed prices dropped by an average of 0.5pc between June and September.

There were just under 3,300 properties on the market in Connacht/Ulster on September 1, up 15pc from just over 2,800 on the same date a year ago.

Each quarter, surveys over 1,000 property market participants, asking them about their sense of the market as a whole, and their own intentions. The latest report finds that just over half of those looking to buy but not straight away cite the need to save for a deposit as a key factor in delaying home purchase.

Almost 70pc of respondents cite the lack of homes as a factor in delaying home purchase, down from 80pc two years ago. The lack of supply has been a relatively constant factor in the market in the last five years.

The author of the report, associate professor in economics Trinity College Dublin, Ronan Lyons, says preliminary Census 2022 figures indicate that the underlying housing need in Ireland over the coming three decades is likely to be in the range of 42,000 to 62,000 homes, not far off twice the underlying level of 28,000 new homes per year that underpins Housing For All, launched in 2021.

In reference to Dublin, he said the more homes there are on the market, the less upward pressure – and more downward pressure – there is on prices.

“The ‘magic number’ – such that there can ever be one – is somewhere around 4,500. More homes on the market in Dublin than this, and there is likely to be some downward pressure on prices. Fewer homes, and prices are likely to rise. We can see these patterns over the last decade of the Dublin housing market – and indeed (if we) extend it to look at other parts of the country,” he says.

“The open question for the coming months is, with interest rates rising and significant inflation in non-housing costs – for effectively the first time in 15 years – whether falling demand will play its role too,” he added.

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