House price inflation jumps to 11% on weak supply

Annual house price inflation has accelerated to 11 per cent, its highest level since 2017, according to property company DNG.

Prices are now 11.1 per cent higher at a national level and are 9.4 per cent higher in the capital than they were in June 2020 primarily as a result of strong price inflation in the market during the first six months of 2021, it said.

DNG said prices at a national level have increased in value by 7.9 per cent this year alone.

In the first six months of the year, an uptick in the rate of increase in house prices has been driven by the shortage of supply in the context of rising disposable income, elevated savings levels and demographic pressures, it said.

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The group’s latest house price gauge, which tracks residential property price movements, shows that the average price of a resale property now stands at €482,617, its highest level since the first quarter of 2009.

This was still 33 per cent below their previous peak level in 2006 but 99 per cent above the market low point in 2012.

At a national level and excluding Dublin, the average price of a home now stands at €233,582 up from €210,258 in June 2020.

DNG’s analysis of the stock of homes currently for sale indicates that there are approximately 35 per cent fewer homes listed for sale now, compared to the same time last year, and 45 per cent fewer than at the same point in 2019.

" Our analysis of purchasers during the second quarter shows that first time buyers continue to dominate the resale market accounting for 54 per cent of purchases during the period," DNG's director of research Paul Murgatroyd said.

“The elevated level of demand in the current market is evident now because of the easing of the restrictions placed on the property sector and house hunters during the last lockdown,” he said.