Property prices are showing signs of easing as data from the Central Statistics Office shows that the annual rate of increase for property prices decreased by one percent to 13% in July. 

Despite the Residential Property Price Index surpassing its 2007 high by 0.8%, the deceleration of property price inflation suggests that rising interest rates and the cost-of-living squeeze are starting to have an effect on housing demand. 

Year-on-year price inflation in Dublin fell by 0.9% to 10.4%, while prices in the rest of the country rose by 15.2%, a drop from 16.2% the month prior. 

Despite the index overtaking its 2007 high, Dublin property prices are still 7.9% lower than their Celtic Tiger peak, but outside of Dublin this falls to just 0.1%. 

A 0.75% interest rate increase by the European Central Bank earlier this month, following a 0.5% increase in July, is pushing up mortgage rates, with tracker mortgages affected first.

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Similarly, inflation rates of 9.1% are eroding savings accumulated during the Covid-19 pandemic, affecting potential homeowner’s ability to afford deposits, while price rises in home fuel and electricity, which rose 21.6% in July, are forcing consumers to conserve extra funds for a tough winter ahead. 

Outside of Dublin, year-by-year increases have seen falls across the board.

The West region, encompassing Galway, Mayo and Roscommon, saw price increases fall by 0.7% to 19.1%. 

The South-West, including counties Cork and Kerry, saw a 1.2% difference between the two months, while the South-East, containing counties Carlow, Kilkenny, Wexford and Waterford, weighed in at a 1% difference.