HOUSE PRICES IN Ireland have risen by 9% in the past 12 months as the supply of homes remains severely restricted.

Two separate reports by property websites Daft.ie and Myhome.ie found a major increase in prices over the past year, while noting that the availability of properties for sale has dropped significantly.

The Daft quarter 3 house price report found that the average price nationwide in the third quarter of 2021 was €287,704, a total of €24,000 higher than last year.

This figure is 22% below the Celtic Tiger peak but three quarters above its lowest point in 2012. 

This national trend hides notable regional differences. Prices in cities are inflating at a much lower rate than rural areas.

Dublin saw a 4.9% increase in the year to September, its slowest rate of inflation in a year. In Galway city the rise was 3.1% year-on-year, in Cork city it was 5.8% while in Limerick city it was 8.4%.

Outside the main cities the rate of inflation was significantly higher, jumping by nearly 13% year-on-year. In Mayo and Leitrim Daft found that prices are more than 20% higher than a year ago.

The total number of properties available to buy on 1 September was just below 12,700. Daft says this is one of the lowest figures recorded since the rise of advertising properties online, despite increasing slightly from levels recorded earlier in the year.

The figure is one third lower than the same date a year earlier and a little over half the amount for sale in September 2019. 

The report’s author Ronan Lyons, economist at Trinity College Dublin, said the latest market signals suggest that “thankfully, the worst of the Covid-19 squeeze has passed.”

“Inflation has eased a bit and there has been a modest improvement in the number of homes available to buy at any one point. Nonetheless, while the Covid-induced spike in market conditions may be passing, the underlying issues remain,” Lyons said.

The stock for sale remains well below pre-Covid-19 levels, while many parts of the country are still seeing prices that are at least 10% higher than a year ago.

Lyons added that the Government’s ‘Housing for All’ plan contains a welcome boost in social housing activity but construction costs “do not appear to be on policymakers’ radars.”

The Myhome quarter three report also found that annual asking price inflation rose by 9% nationwide as buyers “aggressively” pursued available properties.

The measure was up by 7.3% in Dublin and by 10.1% elsewhere around the country.

The report notes that the 9% annual inflation rise is, however, down from a figure of 13% recorded in quarter two.

The author of the MyHome report, Conall MacCoille, Chief Economist at Davy, said that the findings of the report provide little respite for homebuyers.

“The market is still starved of supply, with prices being bid-up aggressively by homebuyers. This behaviour is evident in transactions being settled well above asking prices,” MacCoille said.

“Unfortunately, there has been only a marginal improvement in housing market conditions for homebuyers.

“There are currently 13,500 properties listed for sale on MyHome.ie, up only slightly from 12,700 in quarter two 2021 and still well down on circa 20,000 pre-pandemic.

“Although new listings have recovered through 2021, the underlying picture is that vendors have only gradually returned to the market whereas demand has remained robust,” MacCoille added.

Note: Journal Media Ltd has shareholders in common with Daft.ie publisher Distilled Media Group.