Average price of a second hand home in the capital now stands at €520,000.

According to the latest residential market review from leading property advisors DNG, the average price of a resale property in the capital increased by 0.9% in the first three months of the year as strong demand and a relatively low level of available stock on the market served to nudge prices higher.  The DNG House Price Gauge (HPG) returned to growth during Q1, following a decrease in the average price of a resale property in the capital of -1.6% in the final quarter of 2022.

As a result, the annual rate of house price inflation in Dublin remains positive but showed further signs of stabilisation, reducing to 2% for the year to March 2023, from a rate of 3.1% for the year to December 2022. The latest results of the DNG HPG contrast with the same period a year previously, when prices rose by 2% in Q1 and by 8.8% on an annualised basis in the twelve months to March 2022. 

The DNG HPG recorded the strongest rate of growth in prices at the entry level to the market, with properties valued at less than €350,000 increasing by 1.8% in the first three months of the year. West Dublin , which contains the largest stock of entry level properties, saw prices rise by 1.6% in the three months to March this year.  The report outlines how first time buyers continued to be very active in the second hand market in Q1, purchasing 52% of properties sold over the three months.  DNG’s analysis shows that 67% of all purchasers relied on mortgage finance to complete their purchase, whilst a further 23% were cash/non mortgage finance buyers.   The average price of a resale property in the capital now stands at €520,000, up from €510,000 a year previously.

An analysis of vendors’ reason for selling their property during the first quarter reveals that 26% of sales were landlords offloading investment properties. However, this figure has remained relatively stable over the course of the last twelve months with one in every four sales of second hand homes being investment properties.  Conversely, just 11% of purchasers during Q1 2023 were buying properties for investment purposes, meaning the supply of rental accommodation available in the market continues to dwindle quarter on quarter, which is exacerbating the chronic issue of a lack of affordable private properties available to rent across in the capital at the current time.  

The DNG Apartment Price Gauge (APG), which measures price movements in the capital’s apartment market, recorded an increase in apartment prices of 1.0% during the first quarter of the year, following a decrease in the average price of an apartment in Q4 2022 of -1.8%.  The DNG APG shows that apartment prices in the capital remained relatively stable in the year to March 2023, increasing by 0.6% in the year to the end of Q1 2023.

DNG Director of Research Paul Murgatroyd said, “The residential sales market is currently dominated by investors selling investment properties on the supply side, and by first time buyers purchasing their first home on the demand side. It is therefore no surprise that the strongest price growth during the first quarter was seen in west Dublin and at the starter home level of the market.”  

He continued “However, despite a small uplift in values in the capital during the first three months of the year the overall picture in the sales market is one of relative price stability with house and apartment prices all but unchanged over the last twelve months, which will be some consolation for buyers in the current market.  Available stock levels, whilst rising, are still well below pre-pandemic levels and below the level required to meet demand so the lack of supply is helping to underpin prices at the present time. There are 16% more homes available in the market today, compared to this month last year, depending on location”.

Commenting on the results, DNG CEO Keith Lowe said, “Property prices have started to rise slowly in the early part of this year and the low rate of price inflation reflects an increased amount of property available to buyers.” He added “ It is noteworthy that according to a recent CSO report, the median age of house buyers who take mortgages was 37 in 2021 up from 36 in 2016. This trend needs to be reversed and we are calling for the government to again re-introduce mortgage interest relief to assist younger first time buyers in particular, as it is having a direct impact on affordability. Many first time buyers are currently in rental accommodation and assisting them to move into homeownership has the added advantage of freeing up much needed rental accommodation.”

He continued “The rental market continues to remain under significant pressure and whilst the Government has recently made the very hard decision to end the eviction ban, one can see the reasoning behind the decision as potential purchasers would be slow to buy a residential  investment property facing the prospect of never being able to secure vacant possession at some point in the future. The existence of rent price caps has created a two-tier market with a significant amount of ‘rent capped’ properties seeing rents at half the level achievable for properties where the rent cap does not apply. The unintended consequence of this has been an exodus of landlords from the sector, which has also contributed to the elevated rent levels we see in the market today.”

For further information, interviews, or media commentary, please contact:

• Tom Delaney, Gibney Communications, 087 7437533 Email: tomdelaney@gibneycomm.ie

Or

• Paul Murgatroyd, Head of Research & Business Development, 087 6998884, Email: paulmurgatroyd@dng.ie

See reports on rte.ie and irishtimes.com

 

ABOUT DNG:

The DNG Group is a multi-disciplinary property advisory practice based in the capital. We are Ireland’s premier agency with a branch network which extends to 80 branded offices located in virtually every major city and town in the country. DNG is one of the largest sellers of residential property and new homes schemes in Ireland.

Our national franchise network contains some of the best agents in the business offering their superb local expertise with the backing of Ireland’s premier property brand.

DNG are members of the Society of Chartered Surveyors Ireland and the Institute of Professional Auctioneers and Valuers and work to its strict codes and standards.