Decline in Dublin House Prices by 1.9% as Higher Interest Rates Deter Buyers

According to the latest data from the Central Statistics Office (CSO), house prices in Ireland increased at an annual rate of 1.4% in September. While this is a slight improvement from the previous month, prices remain close to a three-year low due to the impact of higher interest rates on buyer activity.

Notably, Dublin experienced a continued decline in house prices, with values falling at an annual rate of 1.9%. This marks the sharpest drop since 2012, during the financial crisis. In contrast, prices outside Dublin rose at an annual rate of 4%.

The property market in the country has slowed significantly since the surge driven by the pandemic in 2020 and 2021. The recent deceleration in headline price growth and the reversal in Dublin can be attributed to 10 consecutive interest rate increases by the European Central Bank, making borrowing more expensive for potential buyers.

This softening is evident in a slowdown in transactions, as indicated by the latest CSO data. In September, there were 4,255 house purchases filed with Revenue, reflecting a 7.2% decrease compared to September 2022 and an 8.3% decline compared to August 2023. The total value of transactions filed in September was €1.6 billion.

The median price for a dwelling in the 12 months to September was €320,000, according to the CSO. In the Dublin region, the highest median price was €435,500, with Dún Laoghaire-Rathdown having the highest (€635,000) and South Dublin the lowest (€405,000).

Outside Dublin, Wicklow (€425,000) and Kildare (€387,500) had the highest median prices, while Longford had the lowest at €160,000.

Since their trough in early 2013, property prices in the Republic have increased by 131.7%. Dublin residential property prices have risen by 129% from their low in February 2012, while prices outside the capital are 141.9% higher than the trough in May 2013. mix mix mix mix mix mix mix mix mix

Dermot O’Leary, an economist at Goodbody, noted the resilience of home prices in Ireland despite rising interest rates, particularly in the new homes sector, where prices rose 10% year on year in the third quarter.

Brokers Ireland commented on the trend, noting the ongoing decline in prices in Dublin and increases elsewhere. Rachel McGovern, director of financial services at Brokers Ireland, highlighted the year-on-year drop in sales volume and the decrease in the number of new dwellings transacted in September, attributing it to the pressure of increasing interest rates, which have seen ten upward movements since July 2022. Nevertheless, she noted that high demand persists, with many buyers relying on inter-generational support to enter the market.