According to
the official CSO index residential property prices rose by 12.3% in 2014 and
increased by as much as 21% in Dublin. However the CSO also indicates that
prices fell by 1.4% in January and by 0.4% in February. So where is the market expected to go in
2015?
The fall in
house prices in the first quarter of 2015 was led by a fall in prices in Dublin
where affordability was becoming stretched. House prices in Dublin are 5.9
times the average wage compared to 3.9 times in the South East. Outside of
Dublin however both MyHome.ie and Daft.ie have recorded an increase in asking
prices in the first quarter of 2015 with asking prices in Co. Waterford 12.2%
higher than in Q1 2014.
It is
unsurprising that the property market has calmed down somewhat after the ‘mini
bubble’ that appeared in the second half of 2014. The end of the capital gains
tax exemptions, which may have temporarily inflated demand last year, has
reduced the number of investors currently in the market. In addition the new
Central Bank’s mortgage lending rules have reduced the affordability of second
time buyers in particular.
The number
of sales completed is up significantly in 2015 compared to the same period in
2014. According to the Property Price Register nationally the number of
transactions completed in the first two months of 2015 is up 44% on the
corresponding period last year. The number sales closed in Tramore in the first
quarter of this year is up 52% on the same period in 2014. However with the
conveyancing process often taking up to three months to complete it is
reasonable to assume that most of these deals were actually agreed in the latter
part of 2014.
In summary
there appears to be the continuation of a two speed property market in this
country, which has been the case for a number of years now. Property price
growth has slowed in the capital with some evidence of falling prices. But the
property market cycle in the rest of the country lags Dublin by 9 to 18 months
and as yet there is no evidence to suggest that local property prices won’t
continue to increase in 2015, albeit at a lower rate than last year.
Barry Herterich BA MIPAV REV
