A NEW REPORT has found that national housing asking prices are up 7.5% over the year – the highest level of annual inflation in two years.
The latest quarterly house price report by MyHome.ie in conjunction with Bank of Ireland lays out a number of factors putting pressure on the housing market in Ireland.
Of the homes available on MyHome.ie, one in 7 (14%) sold for 20% over the asking price.
Annual asking price inflation in Dublin is now 6.2% and the rate has accelerated to 8.5% in the rest of Ireland.
In the report of the properties available on MyHome.ie, the median asking prices for homes nationally was listed as €365,000. In Dublin, the median price is €455,000, while outside of Dublin, the median price is €365,000.
The report found that pay growth in Ireland had risen by 5.6%, allowing workers to borrow more and thus leading to a record-high level of mortgage approval rates – up 6.2% on the year prior to €318,300.
Rent inflation has moderately improved, sitting at 4%.
Commenting on the report, author Conall MacCoille, Chief Economist at Bank of Ireland, said: “The broad message from the MyHome asking price data is that the CSO’s official measure of house price inflation, based on transactions, looks set to peak in the coming months.
“That said, residential property price inflation was 9.6% in July, ahead of our MyHome figures, because homebuyers are increasingly paying over and above the original asking price. Nonetheless, we still expect RPPI (Residential Property Price Index) inflation to fall back in the coming months, and finish 2024 at 7.75%.”
A shortage of housing has been pointed to as the reason for rising house prices, alongside inflation. The number of properties listed for sale on MyHome.ie in September was just 13,100, still well down from pre-pandemic levels.
MacCoille said that the rising population has been an important factor in pressure put on the Irish housing market, saying: “Perhaps the most striking news since our last MyHome report is that Ireland’s population grew by 1.9% pace for a second successive year, to 5.38 million in 2024.
“We have not seen population and economic growth at this level since the Celtic tiger era, and as a result the housing market is being put under intense pressure.”
According to this report, Ireland would need to deliver an additional 206,000 homes this year alone to match the UK’s housing to population ratio. This is a rapid increase: in 2020, Ireland would have needed 138,000 extra homes – 68,000 fewer than this year – to match the UK’s market in relative terms.
This is despite housing starts having risen to 49,000 in the 12 months to July, with completions expected to rise sharply to above 40,000 units in 2025.
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