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House prices around the country to rise by 10% in 2018

Written by Robert McHugh, on 2nd Jan 2018. Posted in Ireland

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A new house price report from MyHome.ie has found that house prices are expected to continue to rise in 2018 but at a slightly slower pace due to a tightening of the Central Bank lending rules.
 
The report, which is published in association with Davy, predicts house prices will rise by 8% overall in 2018, split between double digit growth outside the capital and a rise of  6 or 7% in Dublin.
 
While asking prices fell back by 1% nationally in the final quarter and 0.4% in Dublin– as per normal seasonal trends - the report shows that 2017 was a year of robust inflation, with prices rising by 10.2% nationally and 11.1% in Dublin.
 
The median asking price for new sales nationally was €242,000 in the final quarter. In Dublin, the median price was €330,000 compared with €195,000 in the rest of Ireland. For the entire stock of properties listed for sale on the website prices rose by 6.2% nationally and by 6.3% in Dublin during 2017.
 
MyHome.ie say asking prices have fallen in the final quarter of each of the last five years before bouncing back in the Spring and they predict that pattern continuing in 2018. However, due to the Central Bank tightening its mortgage lending rules, the property developers believe house price inflation in more expensive areas, like Dublin, will slow somewhat to around 6 or 7%.

Homebuyers in Dublin have been taking out higher levels of mortgage debt, but with the availability of credit constrained, further price increases will also be curtailed slightly in 2018. However the report predicts double-digit price gains are likely to continue outside the capital where the recovery began later, prices are cheaper and there is still scope for leverage on mortgage lending to rise.
 
Commenting on the report, Chief Economist at Davy, Conall MacCoille said, "One of the benefits of rising house prices is a reduction in the number of people in negative equity. Many Irish households have been unwilling to move home due to their stretched finances, specifically their lack of housing equity. Looking forward to 2018 rising house prices have now dragged all but 9% of owner-occupiers out of negative equity, a stark improvement from the 36% at end-2012. With greater equity in their homes, more Irish households will seek to move home, helping housing market activity."
 
Managing Director of MyHome.ie, Angela Keegan added, "While the increase in transactions – it should come in around 55,000 for 2017 – is welcome the overall picture is that of an illiquid market hindered by the lack of fresh housing supply. If the Irish market was functioning properly we would be seeing around 90,000 transactions per year. At the end of the year the number of properties listed for sale had fallen to just 18,900. This is a fresh record low, down 9.4% on the year – representing less than 1% of the housing stock. Not surprisingly the average time to sale agreed was just 3.8 months nationally and 2.8 months in Dublin. These figure show that whatever stock is for sale is sold ever more quickly."
 
Source: www.businessworld.ie

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