Irish house prices up 2.78% y-o-y in Q1 2019

Ireland’s house price growth is decelerating, amidst the uncertainty surrounding the Brexit. Residential property prices increased by a modest 2.78% during the year to Q1 2019, a sharp slowdown from y-o-y rise of 12.4% a year earlier. In fact, it was the lowest growth since Q2 2013. During the latest quarter, Irish house prices actually fell by 1.35%. 

Demand is now falling but supply continues to rise

In Q1 2019, the total number of residential dwelling purchases fell by 15.9% to 7,650 units from a year earlier, according to Ireland’s Central Statistics Office. Similarly, sales value dropped 14.9% y-o-y to €2.21 billion in Q1 2019. In Dublin, the number of sales dropped 18.2% while sales value fell by 20.2% over the same period.

New dwelling completions surged by 23.2% to 4,275 units in Q1 2019 from a year earlier. Likewise, dwelling permits rose by 41.9% y-o-y to 2,024 units in the first two months of 2019. 

Rents, rental yields: excellent yields at 7.18%

Dublin apartment costs are around €2,354 per sq. m. 

Ireland: typical city centre apartment buying price, monthly rent (120 sq. m)
  Buying price Rate per month Yield
Dublin € 282,451 € 1,690 7.18%

Recent news: The Irish economy grew by about 6.7% in 2018, after GDP growth of 7.2% in 2017, 5.1% in 2016, 25.5% in 2014 (obviously a statistical artefact), 8.3% in 2014, and 1.1% in 2013, according to the European Commission. The strong growth, despite uncertain economic outlook, was mainly driven by companies nominally relocating in the country, such as Perrigo Co. and Jazz Pharmaceuticals Plc, who are attracted by the country’s very open economy and by its relatively low tax inversion rate of 12.5%. 

Recently, the European Commission has revised downwards its 2019 growth forecast for Ireland to 3.8%, from the initial 4.5% projection, citing the ongoing decline in confidence, economic uncertainty and global trade tensions as contributing factors.