HOUSE prices in Clare fell by 1.6% in the last three months of the year, according to Daft.ie.
It found that while Clare house prices were still 5.7% higher at the end of 2022 compared to a year earlier, they had dropped by 1.6% in the final quarter of the year.
The average house price sought in Clare on Daft.ie in the final quarter of last year was just over €234,000, almost twice the amount sought at the low point of the crash.
In Clare the average price sought for a one bedroom apartment now stands at €99,000, 14% greater than at the end of 2021. At the other end of the spectrum the average price sought for a five bedroom detached house is €299,000, down 1% on the end of 2021.
Writing in the Daft.ie report, economist Ronan Lyons said that supply and demand may be beginning to align.
“During the 2010s a pattern emerged of what the academic literature calls a ‘cold’ market in the final three months of the year. In each year from 2014 to 2018, encouraged by the calendar year basis of the mortgage market rules and their exemptions, prices rose in each of the first three quarters but fell in the final one.
“This seasonality was noticeably absent from the market between the middle of 2020 and the middle of 2022, when prices rose for eight consecutive quarters-the longest run of increases going back to the start of the Daft.ie sales report in 2006.
“What are we to take from two quarters in a row without an increase in prices? The last time this happened, in the second half of 2019, it could be interpreted, as my commentary on that report did-largely as a sign of supply, both new and second-hand, at long last coming up to the levels needed to meet market demand.
“Over the course of 2019, almost 70,000 homes were listed for sale-with just over one third of these (24,000 on average) on the market at any point in time that year.
“Covid-19 caused havoc with the sales market and the number of homes advertised in the year to February 2021 was just 46,000. But even as supply faltered, demand remained strong-boosted by unexpected savings during the pandemic. Prices surged and the total number of homes on the market halved to just 12,000 in early 2021.
“Since then, supply has recovered-slowly and steadily rather than dramatically- with 64,000 homes put up for sale during 2022, a level of supply similar to 2018.
“Any loss of supply, though, takes time to be replaced and while the flow of properties onto the market has almost fully recovered, availability – at just over 15,000 homes on December 1 – remains closer to the pandemic low than the pre pandemic level.
“Coupled with this another 6% increase in the average listed prices, this suggests that at least over the course of 2022, demand has remained strong. But what will 2023 bring? There are reasons to think that demand has started to cool off, following an unprecedented couple of years.
“On the one hand, interest rates have risen. One mortgage market provider started the year with fixed rates below 2% but will enter the new year with rates from the same product of almost double that. This mathematically filters through to affordability and the maximum loan a provider will lend.
“Underpinning the change in mortgage market conditions, though, is of course a wider change in macroeconomic conditions, at least part of which is related to economies adjusting to a post lockdown world and to the war in Ukraine. Such uncertainty makes people less confident about the future.”
Owen Ryan has been a journalist with the Clare Champion since 2007, having previously worked with a number of other publications in Limerick, Cork and Galway. His first book will be published in December 2024.