City slowdown: urban homes are becoming too expensive to sell
■ Longer sale times in capital as families struggle for finance
THE property market is slowing down in the cities, as working families are increasingly finding it too expensive to rent or buy.
The average Dublin semi-detached home now fetches €443,000, well above the €300,000-€315,000 mortgage threshold typical for an average couple earning a combined €70,000.
In contrast, in outer commuter towns and further afield, including areas such as Laois and Roscommon, prices continue to surge as there remains huge demand for any affordable home.
The first signs of urban slowdown today are revealed in the quarterly Irish Independent/ REA House Price Index.
It reveals the latest price trends and that it is taking a week longer to sell an average home in Dublin than it did three months ago.
City vendors are bringing their homes to market with higher expectations than are reasonable, estate agents report.
Some much-needed new builds are also helping to ease the pressure on prices in the cities, a trend which is not being replicated in smaller towns.
The average semi-detached house nationally now costs €232,441, up 1.5pc in the quarter and 8pc in the year – indicating the market is steadying after an 11.3pc overall rise in 2017.
The highest increases were generally seen in the rest of the country’s towns, which experienced a 2pc quarterly rise to an average of €153,094 – up €3,000 in the space of 12 weeks.
Inflation in towns is being blamed on the existing supply of affordable stock being snapped up.
Overall, the highest increase was at Castlerea in Roscommon with reported rises of €10,000 to an average €120,000 (9.1pc).
Dublin commuter counties continued recent steady growth with a 1.7pc increase, with the average house now selling for €246,278 – up €4,000 on the first three months of the year.
Meanwhile, other locations saw zero increase in the quarter after strong inflation earlier in the year. Among them were Cavan, Clare, Donegal, Limerick City, Offaly and Wexford.
But even in Dublin city and county the rate of growth was just 0.8pc in the past three months, with prices even falling slightly in one suburb.
After a hike of 12.5pc in 2017, the average price of a second-hand semi-detached house in post-coded parts of the capital now stands at €443,000.
This trend has pushed the traditional Irish family home beyond the ability of many families to rent or buy in the capital city, with mortgage caps having a clear impact.
REA spokesperson Barry McDonald said: “Many of our agents in Dublin and suburban counties such as Meath have reported an increase in time taken to sell the average second-hand property and a slowdown in viewings, especially among first-time buyers.
“As agents, our big challenge is to get vendors to accept the reality of the situation on the ground where sellers are not achieving the sort of inflated asking prices that they may expect for properties.
“In my own area, Lucan, we have seen the average threebed semi price drop slightly by -0.6pc (€2,000) in the past three months to €352,000, simply because of the selection of available new homes in the area.”
In the South County prices rose by 0.6pc in the quarter (5pc in the year) to €410,000. In the North County prices increased by 1.6pc in the quarter (9.4pc in the year) to €320,000.
A sale period of six weeks is now typical in Dublin compared with five in the last quarter.
Working from home has become part of the equation, according to REA Forkin in Wicklow Town, which has seen prices rise 3.3pc to €315,000 in the last quarter.
Young Dublin couples are heading for towns like Aughrim and Rathdrum.
“Co-location has become a buzzword among buyers and almost all of their prospective rural purchasers mention working from home for three days a week and commuting to Dublin for the other two,” said Mr McDonald.
Elsewhere Cork city saw prices increase by 0.8pc and 2.4pc in the year, with the average three bed on Leeside costing €317,500. This makes it the slowest growing market.
In Galway city, prices rose 2.8pc in the quarter and 11.2pc in the year to €272,500.
“Buoyant demand is continuing to drive interest in starter homes in Galway, with a significant number of first-time buyers purchasing in estates all over the city as lending has loosened up,” said Mr McDonald.
Average Q2 selling prices were 2.6pc higher in Waterford city, where the typical semi-detached house is now fetching €200,000 and a shortage of supply is reported.
But in Limerick city, prices flat-lined in the last quarter with no increase. In the year prices rose by 8.1pc to €200,000 for an average home.
The REA Average House Price Survey concentrates on actual sale prices of Ireland’s typical stock home, the threebed semi.
It provides an up-to-date picture of the second-hand property market in towns and cities countrywide to the close of last week.