THE CENTRAL BANK’s mortgage lending restrictions are putting a stop to house price inflation in Dublin and surrounding areas, a new study has found.

The third quarter report from the Real Estate Alliance (REA) found that the price of a three-bed semi in Dublin has increased by just 2.7% in the last 12 months.

The rate of increase in second-hand three-bed semis in some of Dublin city’s postcode was just 0.1% over the last three months, compared to 4.1% for the same quarter last year.

The REA Average House Price survey concentrates on the actual sale price of Ireland’s typical stock home, the three-bed semi.

After rising by 12.5% in 2017, the average price of a second-hand semi-detached house in the capital increased by just €5,300 so far this year and now stands at €443,333.

Prices in the north of the county have risen by 7.5% in the past 12 months, and 0.8% since June to an average of €322,500.

This is in contrast to south county Dublin where prices are static and have risen by just 2.4% since last September, with the average house selling for €410,000.

“There is no doubt that the Central Bank rules are having an effect in the market, and are achieving what they set out to do in terms of keeping a lid on prices,” said REA spokesperson Barry McDonald.

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“In the Celtic Tiger years, all prices rose across the board, but in 2018 the system is actually working and the only price inflation is in a new homes market that is concentrated in pockets.

The second-hand market has become extremely price sensitive, not just in Dublin, and when we look across the country it is the areas with quality housing stock available for under €270,000 that are achieving highest growth.

The effect of the Central Bank’s borrowing rule on price ceilings is brought sharply into focus by a drop-off in viewings for four-bedroomed housing in certain areas where they are priced over €400,000, for example.

“Many agents are attributing the lack of transaction to the fine weather in the summer, and report an upswing in activity in September.

“However, there is a defined slowdown in the annual rate of house price inflation as measured in our survey, which is the most reliable indicator of a stable market.”