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According to an analysis of the Property Price Register (PPR), although there were fewer houses being sold in the first three months of the year, the median price of a home in Ireland still increased steeply to €305,000 in the first quarter. A new report from property tech start-up Geowox shows that this represents an 8.9% increase in median sales prices compared to the same period in 2022. Despite this, the volume of completed transactions for new and existing homes between January and April decreased by 3.6% compared to the first quarter of 2022, with a total of 12,588 units sold.
The number of residential units sold between January and April this year (12,588) is lower than the number sold in the fourth quarter of last year (16,881). This decline can be attributed to the typical slowdown in market activity during the winter months.
Geowox reported that despite the decrease in transaction volumes, there was no corresponding decrease in prices. The median price of a home in Ireland during the first quarter was €305,000, which is an increase of €25,000 (8.9%) compared to the same period in 2022. However, the annual rate of house price inflation decreased from 9.6% in the fourth quarter of 2022. Dublin, which had the highest number of sales (3,857), remained the most expensive county, with a median home price increase of 8.1% compared to the previous year and 1.2% compared to the previous quarter.
However, there was a decline in the number of transactions by 2.5% compared to the first quarter of 2022 and 23% compared to the final three months of last year. Geowox reported that house prices increased in every county except Waterford, where the median price of a home sold decreased by 1.8% to €220,000. Longford had the highest increase in prices over the year to the end of April at 23.7%, while Roscommon had the lowest median house price at €149,000, which is 51% below the national median.
It should be noted that the figures are based on sales data rather than asking prices and may be revised because the reporting of a sale to the PPR can sometimes lag behind the transaction itself. Nevertheless, the figures broadly align with Central Statistics Office (CSO) data, which suggests that although house prices are still rising, the rate of growth has slowed in recent months.
The increase in interest rates by the European Central Bank, which translates to higher borrowing costs for potential mortgage borrowers, is likely to have reduced mortgage demand. In March, the Banking and Payments Federation of Ireland reported that the number of approved mortgages in the previous month was 3,378, which was 8.6% lower than the previous month and 13.3% lower than the same month last year. Additionally, the value of approvals fell by 7%.
The effect of higher interest rates is expected to continue to reduce both transaction volumes and prices in 2023, although the property industry anticipates that prices will remain high due to longstanding issues related to supply.
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