According to the latest residential market review from leading property advisors DNG, the annual rate of house price inflation continued to ease during the first half of the year.
The annual rate for year ending June 2023 is in sharp contrast to the same period in the previous year when prices nationally (excluding Dublin ) rose by 12%.
Prices in the capital have effectively remained unchanged over the course of the last twelve months and whilst price growth is still evident outside the capital the rate at which prices are increasing continues to taper off.
According to the DNG NPG, the average price of a resale property nationally (excluding Dublin ) rose by 2.3% in the first six months of this year, bringing the average value of a property to €270,744 up from €264,775 at the end of December 2022.
On a regional basis, the NPG results show that the annual rate of price growth in the year to June was strongest in the West region (+5.0% ) and Midlands (+4.2% ) but below average in the South East region (+1.7% ) however, all regions saw price positive house price inflation in the year to June 2023. However, the pace of price inflation moderated significantly in all regions of the country in the year to June when compared to the year to December 2022.
An analysis by DNG of the buyers of resale properties in the first six months of the year confirms that first time buyers remain the most active players in the market, accounting for one in every two purchases of second hand properties, highlighting both the strength of underlying demand from first time buyers keen to own their own home and their willingness to purchase in the resale market despite the plethora of supports targeted at first time buyers of newly constructed homes.
The continued lack of affordable property options in the new homes sector for buyers remains part of the issue , meaning first time buyers are seeking out homes in the resale market at the price point and in localities where they wish to reside.
Commenting on the results, DNG Director of Research Paul Murgatroyd stated that the latest results of the DNG price gauges confirm that residential property prices across the country are still rising.
"However, the pace at which they are doing so has moderated again, suggesting we may well be closer to another peak in the market. Affordability continues to be an issue impacting buyers, particularly in Dublin and the Mid-East Regions due to strong price growth in the last two to three years”.
“First Time Buyers continued to dominate the market for second hand homes in the capital in the first half of the year, buying 50% of all homes sold. The changes made to the macro-prudential lending rules since the start of the year mean that first time buyers can now borrow four times their income compared to 3.5 times income last year, and this is feeding through into transactions in the resale market.
Recently released data from the Banking Payments Federation Ireland also shows that first time buyers remain very active in the mortgage market, with mortgage approval volumes to first time buyers in May this year up 20% on the same period last year and first time buyers accounted for approximately two thirds of all mortgage approval volumes in the month of May," Mr Murgatroyd commented.
DNG CEO Keith Lowe, noted that residential sales market across the country remained strong in the first six months this year.
"However, the latest DNG price gauge results show further evidence of price stability in the market, with the rate at which prices are increasing continuing to decline slowly which is of course, welcome news for buyers. However, anecdotally we have experienced an uptick in enquiries, viewings, bids and purchase prices being achieved, due to competitive bidding in the last few weeks especially at the entry level to the market.
"This is in part due to a fall in the availability of homes coming for sale, which we estimate to be down eight percent this quarter compared to the same period last year," Mr Lowe stated.
