House prices have started to climb rapidly outside Dublin but fell in the capital between June and September, according to the latest house price report from property website Daft.ie.
Its latest figures show the average asking price in Dublin falling by 1.4 per cent over the last three months, only the second recorded price decline in more than three years.
It means that year-on-year, inflation in the capital has slowed dramatically with declines being recorded in some of the more leafy south Dublin suburbs.
The year-on-year increase in Dublin to the end of last September was 24.5 per cent compared to 2.4 per cent in the same period in 2015.
"The latest figures confirm that the Central Bank borrowing rules have had a dramatic impact on house price inflation in the dearest parts of the country," said author of the report economist Ronan Lyons. "In year-on-year terms, house prices are now falling in Dublin 6, Dublin 14 and Dublin 18, while in other expensive markets - such as Dublin 4, Dublin 6W and South County Dublin, they are effectively static."
He said this “immediate cooling of the market” was to be welcomed “although a side-effect of the income caps is a shift in demand elsewhere in the country.
A very different picture is emerging outside of Dublin where the average asking price rose by 3.9 per cent is just three months. The largest increase was in Limerick city, which saw a 7.7 per cent increase in prices. In rural areas a price increase of 3.5 per cent.
In Cork, prices rose by 6.8 per cent, while in both Galway and Waterford cities there was a 7.2 per cent increase between June and September.
The national average asking price in the third quarter of 2015 was just over €205,000, compared with just under €190,000 a year ago and €164,000 at its lowest point in early 2013.
Responding to the Daft.ie report, the Institute of Professional Auctioneers & Valuers IPAV, challenged Mr Lyons’s view that the Central Bank borrowing rules were a positive intervention.
"In our view the rules were premature and are far too severe," Pat Davitt, the organisation's Chief Executive said.
“The rules are forcing young people in the capital in particular who cannot come up with a deposit for a home to remain in rental accommodation or move to the burgeoning suburbs and beyond where they will incur increased transport costs. This is no way to develop as a society, it is indicative of a dysfunctional property market.”
