HOUSE PRICES SURGED by more than 13% in the past 12 months as the supply of homes remains limited.
Two separate reports by property websites Daft.ie and Myhome.ie found a major increase in prices, while noting that the availability of properties is significantly lower than last year.
The two quarterly reports both found that listed prices have risen at a much faster rate outside Dublin than in the capital.
The Daft.ie report found that asking prices are up 18% in Munster, 16.1% in Leinster and 15% in Connacht/Ulster, when compared to the April-to-June period in 2020.
Meanwhile in Dublin, list prices were 8.4% higher during the same period, the fastest rate of inflation since early 2018.
Price increases outside Dublin were roughly twice as large. In the cities of Cork, Limerick and Waterford, listed prices were 14.3%-15.5% higher in the second quarter, while in Galway city, prices rose 12.6% in the same period.
The MyHome.ie report found that asking prices in Dublin jumped by 10.6% year-on-year, while outside the capital they spiked by 13.6%.
The two reports also show substantial increases in asking prices between the first and second quarters of 2021.
The MyHome.ie report found that asking prices nationally rose by 6.7% – in Dublin by 4%, and outside Dublin by 7.4% – between the first three months of the year and the second three.
The surging prices mean that nationally, the listed price for an average home is now €303,000. It stands at €412,000 in Dublin and €254,000 outside of the capital, according to MyHome.ie.
While asking prices have skyrocketed, the supply of homes has decreased even further.
The Daft.ie report found that the total number of properties available to buy on 1 June was just above 12,300.
That was up slightly from the 11,900 recorded in March, but remains one of the lowest figures recorded since the advertising of properties for sale online first began.
The total availability of homes for sale nationwide at the start of June was one third lower than the same date last year and just half the amount for sale in June 2019.
“Very weak supply continues to plague Ireland’s housing market,” said Ronan Lyons, author of the Daft.ie House Price Report and economist at Trinity College Dublin.
Unlike much of the last decade, when urban centres drove house price inflation, the Covid-19 housing market has seen the opposite trend. Inflation is less severe in Dublin than elsewhere and, outside Dublin, less severe in the other cities than the rest of the country.
The author of the MyHome.ie report, Davy chief economist Conall Mac Coille, said housing demand was now “red hot”.
“The average time to sale agreed has fallen back to a record low of 3.8 months, indicating that whatever stock is available is being purchased ever more quickly,” he said. “Once again transactions are now being settled above asking prices.”
“Whilst demand has remained robust, reflecting that pandemic-related job losses have been concentrated amongst younger age-groups and lower paid workers, price gains primarily reflect the lack of housing supply.”
MacCoille said he now expects house price inflation this year to reach 8% nationally. He added that the news that asking price inflation has returned to double-digit levels will “heap even more pressure on the Government to address the housing crisis”.
However, he warned that there are no easy answers as the problems are being caused by Ireland’s structurally high build costs and a lack of construction sector capacity.
Reacting to the Daft.ie report, the Institute of Professional Auctioneers and Valuers, said the increase in listed prices is echoed in actual sales prices by auctioneers around the country.
“Indeed, in the current market with supply and demand being the most seriously out of kilter it has been in living memory, our members are seeing even higher prices achieved for more exclusive properties,” said Pat Davitt, IPAV Chief Executive.
Note: Journal Media Ltd has shareholders in common with Daft.ie publisher Distilled Media Group.
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