First-time buyers chasing a limited supply of homes have halted a slide in Dublin house prices, the Q1 Real Estate Alliance (REA) Average House Price Index reveals.
House prices in the capital recovered after a pre-Christmas fall and rose by 0.5 per cent to €498,333 in the past three months, an annual rise of 3.5 per cent.
First-time buyers now make up 81 per cent of the market in Dublin city and county, up 15 per cent in three months, as second time buyers hold out for more certainty on interest rates and repayment levels.
Nationally, first-time purchasers make up 60 per cent of the market, the analysis of the first three months of 2023 found.
REA agents are reporting that properties in need of modernisation are becoming more difficult to sell, with buyers conscious of renovation costs and home improvement loans.
And as employees return to offices, the post-Covid trend of leaving cities to avail of remote working has dampened down, with just 11 per cent of sellers escaping to the country.
The REA Average House Price Index concentrates on the actual sale price of Ireland's typical stock home, the three-bed semi, giving an "accurate picture of the second-hand property market in towns and cities countrywide".
The actual selling price of a three-bedroom, semi-detached house across the country rose by 0.6 per cent over the quarter to €293,343 – representing an annual increase of 5.3 per cent.
Time taken to reach sale agreed nationally has stayed steady at five weeks as REA agents reported a less frenzied approach to viewing and bidding.
"The number of houses on the market this quarter has been less than expected,” said REA spokesperson, Barry McDonald.
“However, after a slow start, late February and March viewings have been much more active, with homes in my own area of Lucan in Dublin selling within five weeks.
“As prices increase there are fewer buyers, and we are seeing less competitive bidding and more one bidder-one buyer scenarios.”
Mirroring the capital, cities outside Dublin experienced a 0.4 per cent rise to an average selling price of €310,250.
While Cork and Waterford were static, average prices in Limerick rose by 0.7 per cent in the quarter to €272,000.
The biggest city rise was in Galway city, where prices increased by 0.9 per cent to €334,000.
The smallest percentage increases came in commuter counties where average prices went from €312,778 to €313,056 – a rise of just 0.1 per cent on average.
In traditional commuter towns such as Ashbourne in Co Meath, where prices fell by -1.32 per cent in the quarter, mortgage interest rate rises and cost of living concerns are foremost in purchasers’ thoughts.
“Stock levels are improving, but we are finding purchasers continue to be cautious in Q1, and energy efficiencies and BER ratings are playing a bigger part in property sales,” said Paul Grimes of REA Grimes, Ashbourne.
The country’s large towns saw the largest quarterly increase at 1 per cent, with prices now averaging €211,776 and properties selling faster, at an average of five weeks, than in cities or commuter areas.