IS THIS THE END OF OUR SOARING HOUSE PRICES?

The slowdown we predicted is now happening, says report author

HOUSEOWNERS are cutting the price they seek for selling their homes, giving a strong indication that the property market may be slowing down.

This means that the average asking price of a new home in Dublin is down by €9,000 to €375,000 and by €2,000 nationally to €268,000.

The author of the report, Conall MacCoille, has boosted the optimistic outlook for new-home buyers by saying: ‘The slowdown we predicted earlier this year has now materialised.’ He added

Asking prices fell by 2.5% in Dublin in the third quarter of this year and 0.8% nationally as sellers appear to temper their expectations, a surprise report from property website myhome.ie reveals.

that the ‘double-digit price inflation we experienced earlier this year was simply not sustainable’.

The report says the annual rate of house price growth for the year is now at 5.9% for the entire country and just 2.2% for Dublin, the slowest pace of increase for two years.

Mr MacCoille – chief economist at wealth management firm Davy – said the slowdown may be partly due to the tightening of the Central Bank mortgage lending rules. He added: ‘These rules were aimed at preventing buyers reacting to stretched affordability by over-borrowing, and they have been successful in this regard.’

But some of the slowdown could be due to seasonal factors, reflecting typically weaker prices at the end of a busy summer trading season, he said. The report, based on data from myhome.ie indito HUNDREDS of people have been removed from governmental homeless figures since March due to ‘recategorisation’, according to the Department of Housing.

A report revealed that 1,606 people had been removed from the figures due to changes in the criteria.

There were 294 people removed in April, 571 in March and 741 in August.

Minister Eoghan Murphy confirmed the number of people removed but could not give exact reasons for their removal.

The Simon Community yesterday called for clarity on the ‘reclassification’ of households. cates that the most expensive properties are most affected by the slowdown.

‘For example, the median asking price for one-bedroom apartments was up 11% in the year to quarter three 2018 to €200,000. In contrast median prices for four-bedroom detached homes were flat on the year at €650,000,’ he said.

But with jobs and wages growth over 8%, Mr MacCoille stressed that the underlying demand for property ‘remains exceptionally strong’ and he expects inflation to reach 8% by December.

‘Brexit, of course, remains something of a wild card but the key assumption here is that the UK will move to the transition period in March next year, maintaining the status quo by effectively remaining inside the single market,’ he said.

The report highlighted a pick-up in building. In the year June there were 16,300 new homes, well ahead of the 14,446 recorded for the whole of last year.

Planning permission was granted for a further 26,750 homes in the year to June.

MyHome.ie boss Angela Keegan said the increase in home building was beginning to feed through to improved stock levels, particularly in the capital.

‘There were 22,658 residential properties listed for sale on MyHome.ie in September, up 6% on last year. This is the second consecutive quarter in which the stock listed for sale has increased, breaking the downward trend over the past six years.’

The improvement is even better in Dublin with 5,000 properties listed for sale, up 18% on last year.

‘We are also seeing an increase in transaction figures. The Property Price Register indicates that 34,706 properties have been sold so far this year and we estimate this represents a 6% growth in transaction volumes, although the register is not yet fully up to date. We believe the total figure of transactions for the year will be close to 60,000, which would be an increase of around 9%,’ she said.

Mr MacCoille explained how mortgage restrictions were reining in prices. ‘The Celtic Tiger years demonstrated the folly of allowing rising leverage in the mortgage market drive double-digit house price inflation indefinitely. This time round, the Central Bank’s 3.5 times loan-to-income threshold is preventing households from chasing prices higher by taking on excessive mortgage debts,’ he said.

‘We would normally expect the slowdown in asking prices to feed through into transaction prices within the next three to six months. For now, we are seeing stronger price gains in less expensive areas of Dublin and among the less expensive property types.

‘For example, one-bedroom apartments in Dublin are up 11.4% on the year but fourbedroom detached houses are only up 2.3%.’ christian.mccashin@dailymail.ie