A noticeable drop off in house price increases over the last few months has led some analysts to predict the peak of the current housing boom could be just around the corner.
Rate of Increase Down
While not the reduction so many out there are hoping for, last months increase in house prices was 0.6%. This is down compared to a 1% rise for January of this year, while February saw a 0.7% increase. If this continues then some have suggested the peak is nearly here. So what has caused the slow-down?
Mortgage Rates Increase
Many lenders have announced increases in their rates recently with ICS Mortgages being noticeable for a second increase in as many months. Take this and the fact that the European Central Bank is also raising its rates later this year and combine with the simple fact many first time buyers just can’t afford what’s out there, then a levelling out of prices may well be upon us soon.
Affordability
With property prices currently at just 2% below the highs they achieved during the Celtic Tiger boom in 2007, it is understandable that many buyers have found themselves unable to enter the market.
For example, prices in Dublin rose by 12.7% in the year to March, with prices outside of Dublin rising by over 17%. The largest increase in house prices was the regions just outside of Dublin that saw a 25% increase. Also the shift for many to work-from-home over the last couple of years has led to a dramatic increase in prices in rural Ireland, particularly just outside urban centres.
All of these factors have led to an inevitable slow-down in house price increases. Just how long it will take to level off is unknown but according to some we could see it happen towards the end of this year.
Property Management Company
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