Asking prices for homes have risen 7.5% over the last year, new data from listings website MyHome.ie shows.
That is the highest rate of increase in two years, the latest house price report shows.
It means the median price sought for a home nationally in the third quarter stood at €365,000.
That represents an increase of 0.8% on the three months to the end of September.
The rate of increase is higher outside the capital, with listed prices rising 1.2% during the quarter and 8.5% over the year, bringing the median asking price to €315,000.
Inside the capital, advertised prices climbed 6.2% in the year to the end of September and were 0.3% quarter on quarter, leaving the median price at €455,000.
Supply remains a key driver, with the number of homes listed on MyHome.ie in September standing at 13,100, well down on pre-pandemic levels, although not all homes for sale are advertised on the platform.
“New instructions for sale in Q3, were up 2% on the year, but remain depressed,” said Conall MacCoille, chief economist at Bank of Ireland and author of the report.
“The overarching concern is that the tight housing market is now feeding on itself, with would-be vendors put off by for fear of failing to secure a property once they sell their own home.”
However, Mr MacCoille did also point to new housing starts, which he said were promising because they had risen to 49,000 in the year to July.
“However, the rush of activity prior to the expected expiry of waivers on local authority development levies and infrastructure charges means it is hard to gauge when these starts will translate into completions,” he said.
“Still, housing activity has held up far better than expected to the threat to viability from build cost inflation and elevated energy costs.”
MyHome now expects completions to rise sharply next year to above 40,000 units.
Nonetheless, Mr MacCoille said Ireland’s population growth of 1.9% for a second successive year is putting the housing market under intense pressure.
“A simple way to illustrate this is to ask how many homes Ireland would need to build to match the UK’s housing to population ratio,” he said.
“Our report shows that to ‘catch up’ with the UK’s housing stock would now require an additional 206,000 homes, versus 138,000 in 2020.”
Mr MacCoille said house price inflation, as measured officially by the CSO, 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,” he said.
“Nonetheless, we still expect RPPI inflation to fall back in the coming months, and finish 2024 at 7.75%.”
He added that a further mid-single digit increase in prices next year looks likely.
The report also shows that properties are being sold for 7% over the original asking price, with 14% of transactions settling for at least 20% over asking.
The average time to sale agreed was just 12 weeks in the third quarter, still close to a historic low.
Article Source – Asking prices for homes nationally up 7.5% over the year – RTE
