The average price of a house is now almost €24,000 higher than it was a year ago, with the rise in prices more pronounced outside of city areas.
The latest quarterly sales report by Daft.ie, covering the third quarter of this year, shows a national increase in prices of 9% compared to 12 months ago, but it also notes that house price inflation is at 13% outside the largest urban areas.
In the cities, the average price of a property in Dublin is now €399,323 – up 4.9% from a year ago, while the average price in Cork City is €307,464 – up 5.8%.
In Galway City, the average cost of a property is €316,060, an increase of 3.1%, while the year-on-year rise in Limerick and Waterford is even more pronounced: an increase of 8.4% in Limerick to an average price of €230,585, while in Waterford the average price rose by 6.3% in the same period to €204,759.
Housing prices nationally rose by 1% between June and September this year, but the report indicates that while price inflation is slowing generally, county areas have seen increases to varying degrees not matched in city areas.
For example, in Cork county, prices in the third quarter of 2021 were 13% higher than a year previously, compared to a rise of less than 1% seen a year ago. The average price of a home is now €258,000.
According to the report: "Outside the main cities, inflation remains significantly higher, with prices rising by an average of 12.9% year-on-year. The largest annual increases were in Mayo and Leitrim, where prices are more than 20% above their level a year ago."
The author of the report, Trinity College Dublin economist Prof Ronan Lyons, said: "The latest signals from the sales market suggest that, thankfully, the worst of the Covid-19 squeeze has passed. Inflation has eased a bit and there has been a modest improvement in the number of homes available to buy at any one point."
He welcomed Government's 'Housing for All' plan but said construction costs, which are "the key determinant of viability" do not appear to be on policymakers’ radars.
Prof Lyons said underlying issues remain, including an overall shortage in available properties, with stock for sale still well below pre-Covid-19 levels.
Writing in the report, Prof Lyons said: "Despite the improvement in the number of properties coming on to the market, overall availability remains extraordinarily tight – a testament to very strong demand for homes for sale in the country currently.
"The total number of homes for sale nationwide on September 1st was 12,675 – up slightly from the March low of 11,919 but not much more than half of the pre-Covid average of 22,500 in 2019. Compared to the early 2010s, when there were more than 50,000 homes for sale around the country, it’s a different market entirely."
In its most recent report, MyHome.ie found homebuyers are "aggressively" bidding on the stock available on the housing market.
Author of the report, Conall MacCoille, Chief Economist at Davy said the market is still starved of supply as prices are bid-up by homebuyers.
"This behaviour is evident in transactions being settled well above asking prices. For a limited pool of 450 properties sold during the summer, we have calculated the transaction price was 6.5% higher than the asking price, compared with a premium of 2.7% in Q2 2021," said Mr MacCoille.
Currently, there are 13,500 properties listed for sale on MyHome.ie, down on circa 20,000 pre-pandemic.
New listings have gradually recovered during the year but not enough to meet demand which has remained robust.
Mr MacCoille said that homebuilding is ahead of expectations but “given population growth is adding 30,000 units at a minimum each year, coupled with circa 100,000 units of latent demand built up over the past decade, it will take some time before homebuilding can start to address the housing shortage”.
Angela Keegan, Managing Director of MyHome.ie has called for a major increase in construction activity into the new year and beyond.