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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.
I was in Dublin for a visit over Xmas. Driving around looking at existing houses and the many new housing developments in process. It just shocked me of the quality of life in these residential areas. Houses built on top of each other. No or. very little green areas. Amenities/services being built in some cases years after housing developments up and running. Just shocking to live in and just chasing your tail from one week to the next whether you are renting or the owner. It’s a horrible existence for people. And for people to live in these areas they have to pay astronomical money for the privilege I Was glad to back to my home down the country. A happier and a healthier existence.
@James Fox: I couldn’t agree more. Even if housing developments of large numbers is the way forward (I don’t believe it is), I don’t see why garden and green space is neglected especially outside of Dublin where space is no excuse.
I grew up in a council estate built in the 1950s, without exaggeration the gardens are easily 3 to 4 times that of homes built these days.
It’s just accepted that the postage stamp gardens is what people get these days and I don’t believe it right. I’d love to see a developer break the mould or regulations on garden size but I won’t hold my breath.
@Burt Macklin: is there a max. regulation on garden size ?
@James Fox: Very true. There are no parks or playgrounds for children built with new housing estates. Even a sprawling city like London has huge green spaces in housing areas. But you know why they don’t do that here? Because developers can’t make money from parks and playgrounds.
@James Fox: developers don’t care for the benefits of green spaces, they just see a space they can fit X amount more units into. Dublin is being destroyed by greedy visionless men, and they’re being allowed to by the council and ABP. it’s criminal what’s happening, such a unique and historic city, being turned into a cheap knock off of an ugly Celtic tiger period. Irreversible damage done.
@James Lough: No, sorry I meant break the mould and make larger garden or for government to make minimum garden size regulations
How is anyone young ever going to afford to buy a house? We have sold them out for short term profit.
@Valentine Kane: it’s not just the young. I’m currently trying to find my first home at 35 and it’s proving impossible, so far. And there’s plenty of people older than me who don’t qualify for any sort of useful amount for a mortgage.
@Valentine Kane: Dublin is really not affordable anymore. All the people I know who bought houses last year are all getting 150k+ per year, that’s no where an average working class in Ireland can reach. Last year I was desperately complaining about the housing prices, this year I think I’ll continue. If I could get a good amount of mortgage this year, with my savings, I’ll probably consider somewhere in Kildare, Wicklow, or Meath. Meanwhile, there are tons of economy trend forecasting for 2022 stating there could be a crisis coming, it’s really frustrating.
Don’t worry. Mehole and FFG are on the case guys. Managed to build zero affordable holmes in 2021. They still think affordable is €350,000. Best of luck to the youth of Ireland. Do yourself a favour and head abroad to make a future for yourselves. You’ll just live to work here under FFG. Happy 2022
@Christopher Byrne: And go where? High housing costs is not a uniquely Irish problem, it’s the reality in most developed nations. Canada, Australia, the US, UK, popular destinations for the Irish, all currently experiencing historical highs in their respective real estate sectors. You can go to continental Europe, but not like it’s rosy there either, plus you now need to work harder to integrate with those cultures which isn’t for everyone.
@Damian Anslik: Get on the ferry and go to the UK. A quick cost of living comparision on Numbeo. Dublin v Leeds
You would need around 3,561.52€ (2,989.53£) in Leeds to maintain the same standard of life that you can have with 5,100.00€ in Dublin (assuming you rent in both cities).
Radical action is needed for the housing crisis. This government is not prepared to do that.
@Munster1: Under FF we had a glut of houses. With whole estates unoccupied (labeled Ghost Estates by ever negative people). The opposition(oppastruction) attacked them for encouraging building by demonising builders who talked to the government of the time FF.
FFG policy working as intended. People need to get out on the streets and demand a general election at this stage. This problem is too serious to allow FFG another 3 years of decimating the market and wiping out the hopes and dreams of younger generations in this country. We need action now.
Something has to change. If the average industrial wage is 40,000 x 2 incomes, that is 80,000 x 2.5 = 280,000 Euro. Which will cash strap you for at least 5 years anyways with the monthly mortgage payment.
@Seeking Truth: 80,000 x 2.5 = 280,000?
Can I borrow from you please…
I sense promises, solutions and confidence in the wind.
Housing market is truly out of control. I have been living in Canada since 2013. I managed to buy a townhouse 6 months ago. It was not cheap at all. Very expensive. Since then, a neighbor sold same house with 60 viewings, 27 offers. $175,000 over asking. It is just crazy.
Noticeably higher prices. The deposit I had last year may not be enough for this year.
@katholic: wait until you get to the biddings , you will be needing another 20-50k to be able to get a house. Prices that are listed on the sites are nowhere near the actual price.
@John Johnes: I’m seeing many houses jumping by more than 50k since I started looking.
@Jen Mc: i have a few people that i know who are sitting on approved mortgage for year now , reapplying for it again and again because they cant get a house since they are always being overbid.
@John Johnes: something for me to look forward to so!
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