Latest report shows house prices up nearly 11%

Average mortgage approval surpassed Celtic tiger levels for the first time, increasing by 9.4% on the year to €283,700. Picture: Leah Farrell / RollingNews.ie

Increasing interest rates, affordability concerns, and rising interest rates will result in a decline in the demand for houses during the second half of the year according to a quarterly house price report released by MyHome.ie today.

The Q2 2022 report, in association with Davy, found that annual asking price inflation was recorded at 10.9% nationwide and 6% in Co Cork.

This means the median asking price for a house stands at €320,000 nationally while in Co Cork the median price is €265,000.

In Dublin, the median house price is now €403,000 and in all other counties, the median price is €270,000.

The report noted that "minor" declines in house prices are a possibility. However, a housing crash is "unlikely" due to mortgage lending rules.

Average mortgage approval surpassed Celtic tiger levels for the first time, increasing by 9.4% on the year to €283,700.

The average time to sale agreed in the first quarter declined to a record low of 2.6 months and 2.9 months outside Dublin. Such record times show evidence of "a very tight housing market" with extremely high demand.

Conall MacCoille, Chief Economist at Davy and author of the report said that 2022 should be a year of two halves, with price inflation slowing down in the second half of the year.

“Double-digit inflation and sharp price gains are set to give way to greater concerns on affordability, the economic outlook and the impact of the ECB raising interest rates.”

MacCoille detailed that the excess level of demand in the market results ineffectively 20% of homebuyers with mortgage approval are currently failing to secure a property every year.

Joanne Geary, Managing Director of MyHome.ie, said: “It is now clear that our prediction in the Q1 2022 Property Price Report, that price inflation would slow down, has been proven correct.” 

She noted that 5,000 houses were completed in the first quarter of the year.

“It is encouraging to see stock levels and new listings rise this quarter, albeit from a low base. However, even though we have seen somewhat of a correction, demand is still far outstripping supply and this imbalance needs to be rectified in order for normality to return to the market.”