Home selling prices in Ireland fell by 0.4% in Q4 2022, a sign that demand is weakening as inflation and rising interest rates dent the purchasing power of potential buyers. According to a report by MyHome and Davy, the average selling price nationally fell from the previous quarter to €330,000 ($348,000), although a decline was only recorded in 3% of homes offered for sale. In Dublin, asking prices fell by 0.8%, compared with a 0.2% drop in the rest of the country.

«The number of sellers reducing their asking prices remains low,» said Conall MacCoille, Davy’s chief economist. In addition, transactions in the quarter continued to take place above asking price, which is «indicative of a tight market,» he added.

Still, buyers are under as much pressure as not seen since 2009, and the resilience of the Irish housing market will be tested in 2023, the report said.

Financial institutions have been raising interest rates following European Central Bank hikes, and the average house purchase is 7.7 times average rent, levels similar to those in the U.K., where house prices are falling, MacCoille noted in the report.

The change in the Irish housing market remains relatively small. On a year-on-year comparison, selling prices at the end of 2022 were 6% higher than in the previous fourth quarter.