Asking prices for Irish properties dropped 0.4% in the fourth quarter of 2022 in a sign of how demand is softening as inflation and rising interest rates eat into consumer spending power.
(Bloomberg) — Asking prices for Irish properties dropped 0.4% in the fourth quarter of 2022 in a sign of how demand is softening as inflation and rising interest rates eat into consumer spending power.
The median national asking price slipped from the previous quarter to €330,000 ($348,000), although a decline was only seen in 3% of homes listed for sale, according to a report by MyHome and Davy. In Dublin, asking prices fell 0.8% compared to a 0.2% drop elsewhere in the country.
“The number of vendors cutting their asking prices is still at low levels,” Davy’s Chief Economist Conall MacCoille said. Transactions in the quarter were also still being settled above asking prices, which is “indicative of a tight market,” he added.
Even so, buyers are stretched to a degree not seen since 2009, and the Irish home market’s resilience will be tested in 2023, according to the report.
Mortgage lenders have been raising interest rates following hikes by the European Central Bank, and the average home purchase is 7.7 times average income, similar to levels in the UK, where house prices are falling, MacCoille said in the report.
The shift in Ireland’s housing market is still relatively minor. On a year-on-year comparison, asking prices at the end of 2022 were 6% higher than the previous fourth quarter.
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