MyHome.ie released its latest Property Price Report today, showing a 2.2% increase in the median asking price for properties compared to this time last year.
The latest quarterly house price report, in association with Davy, found that annual asking price inflation stood at 2.2% nationwide, 0.6% in Dublin, and 3.5% elsewhere around the country. House prices, meanwhile, rose by 4.3% on the quarter nationally, and by 3.3% in Dublin. Inflation saw a 4.6% increase elsewhere around the country over the quarter.
According to the Q2 2023 report, this means that the median asking price is now €325,000 nationally, while the price in Dublin is €418,000 and elsewhere around the country it is €280,000. The median asking price in the last three months was €325,000, a 2.2% rise compared to this time last year.
The analysis also showed that the average mortgage approval for first-time buyers hit a fresh record high in May of €298,600, an increase of 3.5% on the year.
The report indicated that supply continues to pose a problem – with 6,000 fewer properties listed for sale on MyHome.ie compared to pre-Covid. While 20,000 homes were available on the site prior to the pandemic, that figure has dropped to 14,000.
There were 14,000 available properties for sale on MyHome.ie in Q2 – still well below the pre-pandemic figure of 20,000.
MyHome.ie said that the property market is showing signs of stabilising, with asking price inflation rising in the second quarter of this year, following three consecutive quarterly declines. Homes are now being sold for 1.4% over the asking price, versus 5-6%, seen this time last year.
The Property Price Register analysis of the year to date also showed a 3.5% growth in transaction volumes compared with the same period in 2022, while housing starts were up 7.4% in the first five months of 2023 compared to the same period in 2022.
MyHome.ie said it had revised its forecast for housing completions in 2023 from 27,500 to 29,500. It also said that the ratio of the CSO’s RPPI house prices relative to the private rent index had fallen by 6% since its peak in early 2022 – implying upward pressure on rental yields.
‘IRELAND’S HOUSING MARKET REMAINS EXCEPTIONALLY TIGHT’
The author of the report, Chief Economist at Davy, Conall MacCoille, said that the data indicated that the market was stabilising and may even be generating a level of momentum.
“Asking prices rose by 4% in Q2 2023, a healthy gain ahead of the busy summer trading season and following three consecutive declines,” he said. “Housing demand remains resilient. There were €1.27 billion of mortgage approvals in May, a fresh record high. This represents 11.5% volume growth in the numbers of homebuyers with mortgage approval.
“The average approval for house purchase was €298,600 in May, up 3.5% on the year. Despite the European Central Bank’s (ECB) rate hikes, homebuyers are still taking on more debt, pointing to upward pressure on house prices in H2 2023.”
Mr MacCoille said that while supply was “still an issue,” a rising rate of housing starts was encouraging.
“The reality is that Ireland’s housing market remains exceptionally tight. The average time to sale agreed in Q2 2023 was still close to a historic low of 3.3 months. There are currently just 14,000 properties listed for sale on MyHome, still well down from pre-pandemic levels which exceeded 20,000,” he said.
However, he added that “there were 30,900 housing completions in the year to Q1 2023 – well ahead of expectations. Furthermore, there were 13,000 housing starts in the first five months of 2023, up 7.4% on 2022 – this growth looks to entirely reflect apartment construction in Dublin.”
He said that a fall in Irish house prices in 2023 was “still plausible~” and not something to rule out – however, given the prospect of further ECB rate hikes, such a situation “now looks less likely”.
“We have left our forecast for asking price inflation unchanged at 1.5% through 2023 but have revised up our forecast for housing completions to 29,500,” he said.
Managing Director of MyHome.ie, Joanne Geary, said that while the rate of housing starts was encouraging, it would take time for prospective homebuyers to see a notable increase in supply.
“The stabilisation of the market is to be welcomed,” she said. “We are moving in the right direction, but we are coming from a very low base in terms of supply. The Government’s demand-side initiatives and looser Central Bank lending rules appear to be negating the effects of rising interest rates, but we also need to see available properties on MyHome.ie approach the pre-pandemic figure of 20,000 to make a meaningful difference.”