HOUSE PRICES IN Ireland have risen by almost 8% in the last 12 months, as significant regional price differences have begun to emerge.

The fourth-quarter report on house prices by Daft.ie shows that there has been a 7.7% year-on-year increase in house prices nationwide.

According to the report, the average nationwide price of a house in the fourth quarter was €290,998, up €21,446 on last year.

The price increases were most significant in rural areas compared to cities, with the Connacht-Ulster region seeing the biggest increase in prices compared to 2020.

The cost of a house in the Connacht-Ulster region is up 14.6% compared to last year, with Leitrim and Mayo seeing the biggest increases, with a year-on-year increase of 19.2% and 18.5% respectively.

The average cost of a house in Leitrim is now €158,246, while €185,864 is the average cost of a house in Mayo.

The price of houses in cities has also grown, with prices in Dublin hitting an average of €405,259, which is a rise of 3.4% on last year.

South Dublin City saw the biggest year-on-year increase, rising by 4.1%, with an average house in the area now costing €446,415.

In Cork City, house prices have risen by 5.5% and the average house price in the city is now €313,436.

Waterford City had the highest increase of all cities, rising by 7.5% compared with 2020 to hit an average price of €211,023.

There were 5,526 new home sales over a nine-month period in 2021, which is an increase of 11% on the same period in 2020. According to the Daft.ie report, the typical prices for the new builds between January and September was €345,000.

There are also issues with the supply of homes across the country, with Leinster, Munster and Connacht-Ulster all seeing record lows in the amount of housing available.

In Leinster, not including Dublin, there were 2,650 houses available to be bought as of 1 December, down 28% compared to the same day a year previous. In Munster, there were just over 3,700 properties available, down from 4,568.

In total, there were fewer than 11,500 homes listed for sale as of 1 December, the lowest total recorded since July 2006, according to the Daft.ie report.

Report author, Assistant Professor of Economics at Trinity College Dublin, Ronan Lyons, said that while price inflation has cooled from a peak earlier this year, it remains “stubbornly high”.

“Inflation in listed prices continues to cool from its mid-year peak. Nonetheless, at nearly 8% for the year, it remains stubbornly high. This reflects a combination of unusually strong demand and on-going weak supply,” said Lyons.

He added that additional supply of homes, including social rental housing, would be needed to help tackle the housing shortages.

“2021 saw the upward trend in prices continue – but with a bit of a twist, as speculation that buyers would move further from work, to where homes were cheaper, started being seen in the data,” said Lyons.

“2021 ends with year-on-year inflation in all but one of the 54 markets covered in the Daft Report – the exception being Dublin 6.”

But inflation in Dublin – at 3.4% – and Galway city – at 1.6% – is below inflation in their surrounding areas. Inflation in Dublin’s commuter counties is running at 11% while inflation in Galway county is nearly 16%. The largest increases are in the cheapest markets, with Leitrim, for example, seeing a 19% increase in prices during the year.

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