House prices fall sharply in August
The Central Statistics Office (CSO) indicated this August that house prices in Dublin fell at the fastest annual rate in nearly three years up to June 2023 as a result of the increase in interest rates affecting affordability of potential buyers. This is the biggest yearly drop on record since October 2020.
Elsewhere across Ireland, house prices have continued to grow year-on-year for June, but at a lower rate of 2.2% – down from 2.6% in May, and compared to an annual rate of 14% in June 2022. Overall on a monthly basis, the average house price rose by 0.6% showing the first monthly increase for 2023.
Property Transactions are decreasing
The latest index by the CSO also showed a significant fall-off in transactions for property purchases, down by 9% in June. The number of closed transactions was just over 4,000, showing the clearest signs yet that higher mortgage costs as a result of interest rate increases are forcing some potential buyers out of the property market.
At the same time in August, the Central Bank released data that showed the average interest rate on new home loans rose above 4% in June, making this figure the highest interest rate value in nearly a decade. As this rate is forecast to continue to increase, the cost of a mortgage in Ireland is expected to continue to weaken demand.
The CSO figures show that the median price for a house in Ireland was €318,000 in the 12 months to June 2023.
The Dublin region had the highest median price of €437,500. The highest median house prices outside of Dublin were in Wicklow at €423,749, and Kildare at €380,000. The lowest median house price was recorded at €160,000 in counties Leitrim and Longford.