Decade ends with return to falling house prices

Property prices in Galway City in the final quarter of 2019 were less than one per cent lower than a year previously, compared to a rise of six per cent seen a year ago. The average house price is now €290,000, 81 per cent above its lowest point. In the rest of Galway, prices in the final quarter of 2019 were 1 per cent lower than a year previously, compared to a rise of seven per cent seen a year ago.

The average house price is now €196,000, 55 per cent above its lowest point.In Ireland housing prices fell by 1.2 per cent during 2019, the first calendar year recording a fall in prices since 2012, according to the latest sales report released this week by a national property website.

The average price nationwide in the final quarter of the year was €250,766, 2.4 per cent lower than in the third quarter and 1.2 per cent lower than a year ago. In Dublin, prices in the third quarter of 2019 were one per cent lower than a year previously, compared to a fall of three per cent seen a year ago. The average house price in the capital is now €366,000, 26 per cent below peak levels.

In the other main cities, prices were higher, with year-on-year increases of 0.8 per cent in Cork, 2.9 per cent in Limerick and 3.3 per cent in Waterford. Outside the cities, prices were also falling, by between 0.8 per cent in Munster and 2.6 per cent in Connacht-Ulster.

Following nearly a year and a half of improving availability, this marks the fourth month where stock on the market has fallen.

The number of properties available to buy on the market nationwide was just under 22,500 in December, down almost five per cent year-on-year. Following nearly a year and a half of improving availability, this marks the fourth month where stock on the market has fallen. The fall in availability is seen in almost all parts of the country, with only Leinster – outside Dublin – bucking the trend.

Reviewing the latest figures, and the performance of the housing market over the last decade, Ronan Lyons, economist at Trinity College Dublin said that in the first and final quarters of the 2010s, sale prices were falling.

“But that is where the similarities end. Over the last ten years, the sales segment of Ireland’s housing market has transformed, albeit slowly. As it enters the 2020s, there appears to be relatively good balance between the pipeline of newly built owner-occupied housing and the number of households able to buy that housing, given constraints such as the mortgage rules.

“Where falling prices represent the ability of developers to build new homes for less, this fall is good for the country’s competitiveness. Nonetheless, just because the sales segment is by and large in balance does not mean that Ireland’s housing system is healthy. There remain huge issues with the other segments of the system, including private rental and social housing.

“In addition, a huge mismatch exists between the existing stock of housing, which is predominantly for households of three or more persons, and the country’s housing needs, with one and two person households not only the majority of households already but also accounting for the overwhelming majority of new households the country will add over coming decades. This is what policymakers need to focus on in the coming decade,” said Mr Lyons.

“In the first and final quarters of the 2010s, sale prices were falling - but that’s where the similarities end,” he concluded.

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