THERE WAS A 9.7% increase in asking prices for residential properties nationwide in 2021, alongside a record low of 11,300 homes listed for sale on MyHome.ie, according to the latest quarterly report by the site in association with Davy.

In Dublin, that rate of asking-price inflation rose by 7.4%, and by 10.6% elsewhere around the country.

“The unwelcome message from this quarter’s MyHome report is that there is little sign of conditions easing,” said Conall MacCoille, Chief Economist at Davy and the author of the report. 

“Prices also rose by an uncharacteristically sharp 1.2% in Q4 during the normally quiet winter months,” he said, adding that this is reflective of the “market grinding tighter, with the stock of homes listed for sale having fallen to a fresh historic low”.

On top of that, the strength of the country’s labour market is also driving housing demand. 

The rise in quarterly asking price inflation means the mix-adjusted asking price for new sales nationally is now €311,000, €421,000 in Dublin, and elsewhere around the country it is €263,000.

The shortage of housing stock is most keenly felt outside of Dublin, and is evident also in the shortened average time it takes to agree a sale; now about three months nationally. 

MacCoille added that Ireland will likely see the 2021 and 2022 inflation forecast beaten now. The prediction was an 11% rise in Residential Property Price Index (RPPI) inflation for 2021 and 4.5% in 2022 — but the real number hit 13.5% in October. 

“Our analysis shows that house prices are now seven times average incomes,” he said, and added that even still,  Irish Central Bank and ESRI estimates “suggest that the mortgage lending rules have stopped house prices rising by an additional 10-25% over and above existing levels”.

Angela Keegan, Managing Director of MyHome.ie, said: “It is promising to see construction activity has increased for seven months in a row to November, but the stark reality is that we will, unfortunately, be living with a dysfunctional property market for some time to come.”

Ultimately, supply is too low to meet the soaring demand for housing nationally. “We have never seen such a lack of stock on the MyHome.ie website and,” said Keegan.

What’s more, given the increased savings and spending power among those looking to buy, experts say it’s unlikely Ireland will see any let-up in demand this year. 

“We can only hope that restrictions are not reintroduced as the construction sector needs to be given every opportunity possible to continue to build properties,” Keegan added.