The average price of a three-bed semi-detached house nationally has breached €300,000 for the first time since 2007, a survey has found.
The Q3 REA Average House Price Index has found house prices in Ireland’s large towns rose by 2 per cent in the past three months.
Prices are increasing at twice the rate of Dublin and the major cities as mortgage-approved buyers chase properties within their price ceiling.
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-bed, semi-detached house across the country rose by 1.4 per cent over the quarter to €301,370 – representing an annual increase of 3.7 per cent and a rise of 28 per cent over the past three years.
Time taken to reach sale agreed nationally fell from six to five weeks as low supply continues to drive sales in an increasing interest rate environment.
Prices in Dublin city rose by 0.8 per cent in the last three months, meaning that the average three-bed semi in the capital is now selling at €504,167 – an increase of 1.3 per cent in the last year.
However, the percentage of first-time buyers in the capital’s postcode zones has fallen from 72 per cent a year ago to 43 per cent in the latest survey.
“While we are still seeing increases in prices, the buyer profile is changing, with younger first-time buyers being increasingly forced to travel for affordability,” said REA spokesperson Barry McDonald.
“A stream of interest rate rises are affecting borrowing capacity and placing ever lower ceilings on first-time buyer budgets.
“The condition of the property, and its BER rating, is all-important, probably now more than ever as buyers cannot afford the additional costs of home renovation.”
Nationally, 57 per cent of sales are to first-timers, a figure that rises dramatically to 85 per cent in Wicklow, Meath and north Dublin as mortgage-approved buyers hunt suitably priced property.
The pricing ceiling effect is also being felt down the coast as far as Wexford where 50 per cent of buyers are now from outside the county, the survey found.
Cities outside Dublin experienced a 0.73 per cent rise to an average selling price of €317,500 – with the annual rate of increase halving to 4.5 per cent from the previous survey.
Prices rose in Cork (1.4 per cent to €365,000) and Limerick (1.8 per cent to €285,000) while Waterford city and Galway remained static.
Limerick city has seen 65 per cent of sales directly linked to landlords exiting the market, according to REA Dooley, who predict that the extension of the rent pressure zones to the whole county will result in a larger supply of ex-rental housing coming to market.
Commuter areas rose by 1.1 per cent to €318,889, with 39 per cent of buyers in areas such as Louth, Meath, Kildare and Wicklow coming from outside the county, a large proportion of them from the capital, with 73 per cent of sales to first-time buyers.
