THE price of apartments in Dublin city centre is falling by up to €4,500 a month, and those in south Co Dublin and Galway city are also on the slide, according to a market survey.

The analysis, prepared by Daft.ie, reveals a number of property price anomalies starting to emerge. The survey is based on prices sought for homes featured on the Daft.ie website, the country’s largest property site.

Price comparisons of the second and third quarter of this year show that values slipped in Dublin 1 and Dublin 2 by 2.7%. With a two-bedroom apartment costing €500,000, this equates to a €4,500 fall each month.

However, Dublin city centre remains one of Ireland’s most sought-after locations, particularly among young people. This has resulted in the fastest rising rents in the country — up 10% in the past year.

Rising rents usually increase the value of properties but Daft.ie’s Eamonn Fallon attributes the anomaly in the Dublin market to investor preference for capital appreciation rather than rental income.

“Capital value increases are all that investors have been worried about in recent years,” Fallon said. “But as the market continues to slow down — and I think it will — rent yields will once again emerge as the strongest reasons to buy.”

In Ireland investors have been relying on capital-value growth for so long that rents have almost become irrelevant. This has led to investors acquiring properties that they have been content to leave vacant. The Economic and Social Research Institute recently reported that 20% of homes built in the past four years remain vacant.

Home owners in Ireland have seen values increase by about €4,000 a month this year. This compares with the €800 a month investors could expect to earn from rentals.

Other areas to show a fall are Galway city, down 1.3% between the second and third quarters, and south Co Dublin, which slipped by just 0.2%.

The survey also confirms that house price rises nationally have slowed significantly.

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