Six out of 10 people working in the property sector expect the pace of house price increases to slow in the coming year, research by the Central Bank and the Society of Chartered Surveyors Ireland (SCSI) has found.
The number who expect prices to remain steady or decline in the next 12 months also increased, according to a “sentiment survey” of chartered auctioneers, estate agents and industry stakeholders such as economists, analysts and academics.
Some 59 per cent of respondents said they expected house prices to increase nationally in the coming year, down from 78 per cent in the last survey.
The agents surveyed expect national price inflation to be 2 per cent for the coming year – down from 5 per cent in the second quarter – and 5 per cent over the next three years, down from 8 per cent.
This is the third survey in a row in which the predicted rate of price inflation has eased.
Regarding Dublin, respondents expected house prices to rise by 3 per cent over the next year and for increases over the next three years to be 5 per cent, down from 6 per cent.
Value and Brexit
A number of factors – specifically the perception of value and Brexit – were deemed to be the primary drivers behind the anticipated price changes at national level. Respondents viewed the construction of new units and the Central Bank’s mortgage measures as the main factors for their views on the Dublin market.
John O’Sullivan, an estate agent and SCSI member, said it was clear from the survey findings that affordability was now impacting house price inflation and, as a result, the rate was moderating.
“The cost of accommodation whether as a purchaser or tenant is the single biggest challenge faced by those in areas of high demand,” he said.
“While price inflation has waned for high-value property, it’s likely that it will also slow for other property classes over the short term. That said the entry level, where demand is very high, is the most active and the least impacted.”
Mr O’Sullivan, a director with Lisney in Dublin, said another factor was that in some cases asking prices have been set too high based on vendor and agent expectations.
“If prices are pushed beyond buyers’ ability to pay, it’s inevitable prices will come back,” he said. “That said, the market is reasonably active and one of the main challenges the sector faces is the time it takes to close a sale due to the protracted legal process.”