Affordability has become so stretched that it is now taking eight times the average salary to buy an averaged-priced home, according to property website MyHome.ie.
Asking prices were up 5.7pc in the three months to September when compared with the same period last year.
This is down from a rise of 7pc in the April to May period this year. The 5.7pc is the lowest rate of increase in almost two years.
In the three months to September, asking prices fell by 0.4pc when compared with the previous quarter.
The average salary is close to €53,000 a year, an analysis of the MyHome figures by Bank of Ireland economist Conall Mac Coille shows.
Outside Dublin, asking prices rose by 6.2pc compared with a rise of 4.8pc in the capital
This is compared with the average household purchase price of a residential property of €426,000.
“Hence, the house price-to-income ratio now stands at eight times. By this measure, affordability is now back at its most challenging level,” Mr Mac Coille said.
The eight times average salary it takes to buy an average home is at the highest level since 2009.
Mr Mac Coille said affordability has become more stretched, leading to a softening in the rate of asking-price rise.
He said in his analysis: “Why is house price inflation slowing? First, affordability has become more stretched.
“Second, the past two years saw first-time buyers taking on mortgage debt following the relaxation of the Central Bank mortgage lending rules. That process has now largely played out.”
Outside Dublin, asking prices rose by 6.2pc compared with a rise of 4.8pc in the capital.
Finance expert Conall Mac Coille
The report found competition for homes remains intense.
One in five property sales is now being transacted at levels that are 20pc or more above the asking price.
First-time buyers have drawn down 27,000 mortgages over the past year, the highest level since 2007.
Meanwhile, the 9,200 mover-mortgages drawn down over the same period is close to the lowest level in a decade.
The median, or typical, asking price is now €385,000 nationwide. That is up 5.7pc on last year.
For Dublin, the median asking price is now €475,000, a rise of almost 5pc on a year ago. Outside Dublin, the median asking price is now €340,000, MyHome.ie said.
Mortgage rates inched lower in August to 3.58pc, according to new data from the Central Bank
There are currently just 13,000 properties listed for sale on MyHome, flat on the year and well down from the 20,000-plus seen before the Covid-19 pandemic.
Meanwhile, mortgage rates inched lower in August to 3.58pc, according to new data from the Central Bank.
This means rates are at their lowest level since March, 2023.
Today’s News in 90 Seconds – Thursday, October 9
There are huge variations in the mortgage rates from different lenders in Ireland, said Daragh Cassidy of mortgage broker and price comparison site Bonkers.ie.
He said variable rates go from 3.21pc to 4.7pc for an average first-time buyer borrowing €300,000 with a 10pc deposit.
Rates for a three-year fixed rate mortgage range from 3.2pc to 4.85pc.
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