Signs that the real estate market is about to peak offer hope to home seekers


The real estate market is nearing its peak and recent booming price hikes will slow down, experts predict.

Rice is up 15.2 percent in the year to March, but the monthly rise of 0.6 percent was lower than in January, when prices rose nearly 1 percent. In February, the monthly increase was 0.7 percent.

If this trend continues, it would mean that the market is about to peak, which could lead to a easing in home price inflation later this year.

The recent gains in home prices come as ICS Mortgages hiked its lending rates for the second time this year, with a 1 percent increase across all loan-to-value bands.

Home prices are now just 2 percent lower than the peak they reached during the Celtic Tiger bubble in 2007.

In Dublin, prices rose 12.7 per cent in the year to March and prices outside Dublin rose 17.3 per cent.

The region outside Dublin where property prices rose the most was along the border at 25 percent.

At the other end of the scale, home prices in the Middle East rose 15.2 percent.

Outside of metropolitan areas, prices are rising as the option to work from home continues to draw people to rural areas.

But the nationwide monthly increase was 0.6 percent, down from previous months.

KBC Bank economist Austin Hughes said this could be a “tentative sign” that house price increases are slowing.

He said rate hikes announced by some lenders, with hints that European interest rates could rise as early as July, could take some of the heat out of the market.

Prices could rise again next month, but could then soften later in the year.

“There are tentative signs that momentum may be fading. This is indicated by the slower monthly increases of late and the year-on-year decline in transactions in March, the first since January 2021,” Hughes said.

He said affordability and buyer sentiment were being hurt by the threat of interest rate hikes from the European Central Bank, as well as pressure on the cost of living and rising economic uncertainty.

Economist at Davy Stockbrokers, Conall Mac Coille, said: “The relatively modest 0.6 percent rise in March could be the first sign that house price inflation is slowly decelerating from double-digit rates.”

Experts say the housing market is unlikely to collapse this time as central bank lending rules mean homebuyers have been unable to overextend and banks have been discouraged from lending recklessly.

Meanwhile, ICS Mortgages has announced a second increase in its mortgage charges.

Three- and five-year fixed rates will increase by 1 percent across all loan-to-value ratios (LTV).

It comes just two months after it raised prices.

The 1 percent increase means the ICS five-year fixed rate will increase to 3.6 percent from 2.6 percent.

That means an extra €131 a month, or €1,572 a year, in repayments for a homeowner with a €250,000 mortgage over 25 years and a credit rating of 80%, said Martina Hennessy of broker Signs that the real estate market is about to peak offer hope to home seekers

Fry Electronics Team

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