Sellers are putting houses on the market for an average of €330,000, 4.1 per cent more than a year ago, according to new figures showing property prices on the rise again.
Property price inflation is accelerating despite high interest rates, online property company MyHome.ie, owned by The Irish Times, says in a report published on Monday.
Nationally sellers sought an average of €330,000 for homes they put on the market over the three months to the end of September.
This was 4.1 per cent more than during the same period last year and 0.6 per cent up on the three months ended June 30th.
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The news follows data published last week showing prices edging up, spurred by a shortage of second-hand homes.
Outside Dublin, sellers asked €285,000 for properties they put on the market in the third quarter of the year, 4.9 per cent more than during the same period in 2022.
That price was 0.4 per cent higher than in preceding three months, which ended on June 30th.
In Dublin the average third-quarter asking price was €425,000. This was 3 per cent up on the same period last year and 1.3 per cent higher than in the three months ended June 30th.
The estate agent reports that buyers were willing to pay up to 3 per cent more than asking prices in September, against 1 per cent at the beginning of the year, indicating that demand for homes remains strong.
MyHome warns that the number of properties for sale on its website trailed pre-pandemic levels. There were 13,400 properties for sale on MyHome.ie during the quarter, well below the 20,000-plus figure that was the norm before the Covid outbreak.
Banks approved mortgages of €298,800 to the average first-time buyer in July, 4 per cent more than in 2022, while the number of home loans given out increased also.
Builders began work on 28,900 new homes in the year to July, but estimates of the Republic’s actual need run to 40,000 to 50,000 dwellings a year.
The report’s author, Conall MacCoille, chief economist at stockbrokers, Davy, said that a shortage of properties for sale had halted the slide in house prices seen earlier this year.
He warned that buyers would have to reconcile themselves to a tighter market.
“That competition for homes is heating up is evident in the 3 per cent premium over the asking price that buyers were prepared to pay in September, up from 1 per cent at the beginning of the year,” he observed.
Mr MacCoille believes that the surprise loosening of Central Bank mortgage lending rules earlier this year would fuel house price increases over time.
“We expect modest, low single-digit price rises from here, close to the pace of pay growth, so affordability is stable or improves marginally,” he noted.
“However, this quarter’s MyHome report highlights the risk that the lack of housing supply could drive more aggressive price gains over the next one to two years.”
Strong growth in jobs has helped maintain housing demand in the Republic, which has avoided the sharp falls in property values in the UK and other countries, according to the economist.
Joanne Geary, managing director of MyHome.ie highlighted concerns over the “ever-present” problems with the supply of homes.
“We know that there were just 13,400 homes listed for sale on MyHome.ie at the end of the third quarter, which is down from the pre-Covid figure of 20,000-plus,” she said.
Ms Geary added that even more striking was the sharp decline in new properties listed, which slid 38 per cent to 7,500 in the third quarter.
The lack of homes has serious social consequences, with large numbers of employed adults living with parents or sharing properties with others.
“This is unsustainable and will rightly be front of mind for the Government as it considers Budget 2024 next week,” said Ms Geary.
