Dublin property price growth slows down significantly

/ 5th April 2022 /

Dublin property prices are slowing down, with the rate dropping significantly over the past three months, a new study shows.

The resale price of houses is going up at an annual rate of more than 8%, while in January prices were rising at 13%.

Experts say a flood of cash into the market from lockdown savings is also starting to dry up and price rises will slow to "around 6%" by the end of the year.

Prices in north Dublin showed the strongest rate of increase in the year to March, increasing by 11.1% on average, while prices were up 7.8% in south Dublin and 7.9% in west Dublin. The latest rise means the average price of a resale property in the capital is almost €510,000 - more than double the market low in 2012.

Paul Murgatroyd of estate agents DNG, which carried out the research, said: "In terms of the capital's residential property market, 2022 has carried on where 2021 left off, with the annual rate of house price inflation at an elevated but stable level of around 9%. The picture of tight supply levels and robust demand continued to push prices higher in the capital in the first three months of the year and this is set to continue into quarter two."

However, he sees the annual rate of increase falling later this year as lockdown savings are used up and buyers face restraints from Central Bank rules on how much they can borrow.

Dublin property
Price — UK, London, Primrose Hill, Chalcot Crescent, NW1. Brightly painted townhouses on the crescent where the film Paddington Bear was set, in the exclusive Primrose Hill neighborhood of Camden Borough

The rules limit most borrowers to 3.5 times their annual income and a maximum of 80% of the property price.

Mr Murgatroyd added: "It's slowed. Those savings are being used. They're still in the system though. We anticipate the rate of increase to slow as the year progresses.

"I'd be expecting that rate of 8.8% to drop back to around 6%. We think the annual rate for 2022 will finish around 6%.

"Also we're facing into a higher interest rate environment later this year so that's going to affect affordability.

"Those head winds will slow the rate of price growth certainly through quarters three and four."

The European Central Bank's base interest rate is expected to rise to 0.5% from its current record low of 0%, where it has been since March 2016, by the end of the year.

The study found first-time buyers were "very active in the resale market", making up 50% of sales in the first quarter of 2022.