New figures from the Central Statistics Office (CSO) published today shows that 2019 represented the slowest growth in Irish house prices since 2012, with prices in Dublin falling by 1%.
Goodbody Stockbrokers say the current uncertainty around the formation of a new government may stall the market somewhat as buyers await clarity.
Residential property prices in Ireland fell for the second month in a row in December. Nationally, prices fell by 0.6% month on month (mom), resulting in the annual rate of growth falling to 0.9% year on year (yoy) (from 1.1% yoy in November). The weakness is widespread, with prices falling for two consecutive months inside and outside Dublin.
In Dublin, residential prices fell by 0.9% in 2019 overall, the first decline since 2011. Outside Dublin, prices rose by 2.8% in 2019, the slowest rate of growth since 2013. The residential price index captures developments at the end of the house-buying process.
In this regard, Goodbody say this weakness may partly reflect the intense period of uncertainty when it looked as if the UK was going to crash out of the EU. However, other issues are also at play, including the binding nature of macro-prudential rules (which would affect the Dublin market in particular) and higher supply.
The Mid-East region (Dublin's commuter counties) is seeing the largest amount of home-building and experienced only a very modest increase in prices in 2019 (0.7%).
Goodbody continue to believe that housing need is in excess of supply but demand for those wanting to buy is inextricably linked to incomes through the 3.5x loan-to-income mortgage rule. Goodbody say the lesson here for builders and policymakers is to implement a policy of reducing building costs to match the income distribution of the population.