The energy crisis has started to affect house prices, with buyers now willing to pay up to €60,000 more for energy-efficient homes rated B or higher, it has emerged.
The latest data from the Irish Independent/Real Estate Alliance (REA) Average House Price Index shows a widening price gap between energy-efficient homes and those with a BER C rating and below.
Homes with the highest A and B energy ratings now sell for 12% more than the lowest rated properties across the country and 16% more in Dublin.
For an average home, that’s a difference of around €36,000 nationwide and nearly €60,000 in the capital, where the average price of a three-bed semi is poised to cross the 500,000 mark. €.
The opening of price gaps reflects a number of factors. Firstly, the steady rise in the price of oil and gas, which still heats the majority of Irish homes, means buyers are increasingly aware of heating costs and are increasingly likely to pay more for a home. better insulated.
The second factor is that the cost of building materials and labor have skyrocketed since the start of the year and therefore the bill for upgrading a C-rated home or less towards a BER A or B increased.
The budget tax on concrete will also have an effect. In the year to April 2022, building and construction materials inflation was 18.2%, while some materials rose further with wood and metal prices up 60%.
The good news is that data from the REA shows that the rate of house price inflation has halved over the past three months as rising costs have prompted buyers to be more cautious.
The actual selling price of a three-bedroom semi-detached house across the country has risen 1.4% over the past three months to €290,630, an annual increase of 10%.
This is a marked slowdown from the quarterly increase of 2.9% recorded over the previous three months, signaling a cooling in frenzied demand in the market.
The time it takes to reach an ‘agreed sale’ has been cut from four to five weeks, with REA officers nationwide reporting a less frantic approach to buying.
As the average real sale price of three-bedroom houses in Dublin City is set to cross the €500,000 mark for the first time, the 0.8% quarterly rise to €497,500 is half than that recorded during the previous three months.
“We have seen a marked slowdown in demand levels and the urgency we were seeing with shoppers has reduced,” said REA spokesman Barry McDonald, whose own Lucan region reported a drop of 2 % of prices, returning to March levels at €410,000.
“The traditional summer lull returned for the first time in a few years and there was no sign of the market warming up in September, which is good news for buyers.
“Rising interest rates and cost of living inflation are definitely affecting sentiment as viewers wait patiently for the right property.
“There is still a massive shortage of accommodation, but Dublin REA Grimes agents are reporting increased supply and a wider choice of properties coming to market, resulting in a longer time to sell.
“A home’s energy rating is becoming a major talking point, with buyers increasingly considering the cost of heating or the increased energy rating of older homes.”
First-time buyers accounted for 58% of all buyers in the last quarter, according to REA, a figure that has risen to 76% in Dublin, as people who have been approved for a mortgage seek to move up on the housing scale.
The strongest quarterly rise was seen in major cities across the country where prices rose 2.1pc to €207,207.
The survey found that a quarter of buyers in this sector came from outside the county as the lure of working from home continues.
Prices in suburban counties have risen 0.7% over the past three months as the time to sell increases from three to five weeks. The only suburban town to see a drop was Dundalk, Co Louth, where prices fell 4% to €240,000.
Towns outside the capital saw an increase of 1.7 pc for an average sale price of €303,750.
Prices in Galway city rose 3.1% to €330,000, with the average home taking just four weeks to sell.
“We’ve seen continued high activity in Galway City over the summer, and prices have been rising, with energy-efficient and well-located homes being the most in demand,” said Kevin Burke of REA McGreal Burke.
“Buyers are very conscious of the cost of running their new home, and energy-efficient A-rated homes command a 20% premium on the market.”
Cork rose 1.4% to €350,000, while Waterford City prices were flat. Limerick saw prices rise 1.9pc to €265,000.
“The number of owners leaving the market is now between one in two and one in three,” said Pat Dooley of REA Dooley in Limerick. “A big problem will be that tenants will have nowhere to go when their notices of termination end, and we need emergency landlord tax legislation to slow the exodus of properties from the rental market. .
The Irish REA Independent Average House Price Survey focuses on the actual selling price of the typical stock house in Ireland, the three-bed semi, giving an accurate picture of the second-hand property market .
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