A report has warned that the number of properties available to buy on the market at the start of this month is down almost one-third in a year and is the lowest such figure in over 14 years.
The latest Daft.ie House Price Report, published today, indicates that a fall in supply pushed home prices up by almost 5% in the third quarter of the year and also said the collapse in property listings in April and May has translated into a fall in stock. This has resulted in the lowest nine-month total since the start of 2015.
Between July and September, inclusive, prices rose by an average of 4.8%. That represents the largest quarterly increase in average prices since the start of 2015 and the fourth largest three-quarter jump overall since 2006.
According to the report, while the average sale price in the third quarter of 2020 was €263,750, up 2.7% on the same period in 2019, there were significant regional variations.
The largest price increases were in urban areas, with prices in Waterford rising 11%, Galway 10% and Cork and Limerick 9% in three months. By comparison, prices in Dublin rose by an average of 2.2%.
The author of the report, Ronan Lyons, economist at Trinity College Dublin, warned of a "prolonged and worsening scarcity" of property on the market.
“The jump in listed sale prices seen in the third quarter of 2020 is not entirely unexpected," he said. "Indeed, it brings the Irish housing market into line with many other housing markets in high-income countries, where Covid-19 has not disrupted the long-term upward trend in housing prices. In Ireland’s case, the collapse in listings in April and May has translated into a fall in stock on the market with fewer than 50,000 homes advertised for sale in the year to September, the lowest total since the start of 2015.
“This highlights the underlying issue affecting the Irish housing system: a prolonged and worsening scarcity. The significant fall in completion of new homes to be registered in 2020 may prove a temporary blip. Nonetheless, the level of new home construction even in 2019 was barely half of underlying need. While the public health emergency clearly dominates policymaker attention currently, longer-term challenges should not be forgotten.
"Chief among these is the lack of housing, especially for smaller households, in or close to Ireland’s largest cities and towns.”
The report shows that in the third quarter of this year the average list price in Dublin City was €380,731 which is up 2.2% on a year earlier.
By comparison, the average list price in Cork City was €290,653, up 3.1% in a year, behind Galway City, where the average price was €306,534, up 3.1%. The average price in Limerick City was €212,681, an increase of 5.2%, while the average price in Waterford City was €192,714, up 5.2%. Overall, only six counties did not see average prices increase.
In the report, Mr Lyons said rising prices at a time of severe economic dislocation reflected the uneven economic impact of Covid-19, saying "it is certain sectors whose workers are disproportionately renters have been most affected." He also said there was nothing to indicate any move towards people leaving cities or looking for larger properties.
"Given all that, it is back to supply, supply, supply," he said. "The ultimate reason prices are rising again is that there are simply not enough homes in the country, given the population and its demographics."