House asking prices rose by average of 12% in last year
Asking prices for houses have risen by an average of 12.3% to €357,851 in the past year, according to the latest Daft.ie House Price Report.
The report notes that this rate of house-price inflation is the highest since the Central Bank's mortgage-lending rules were introduced in 2015.
The rules, which are still in effect, limit the amount of money homebuyers can borrow based on their incomes - as well as the loan-to-value ratio.
The property website said asking prices nationally increased by 3% between April and late June of this year, and are now 40% higher than at the outset of the Covid-19 pandemic in 2020.
According to the report, since this time last year asking prices in Dublin have gone up in line with the national inflation figure of 12.3% (to €467,913), while house prices in Limerick city (+12.8% to €311,086) and Galway city (+12.5% to €426,348) have gone up by a similar figure.
However, the research suggests Waterford city asking prices are 15.2% higher year-on-year at €276,420, with the increase for Cork coming in at 8.6% (to €369,938).
Daft said the strong increases in asking prices for houses are related to very tight supply.
It notes the number of second-hand homes available to buy across the country at the beginning of June was around 12,100, with this figure largely unchanged from a year ago and less than half the pre-covid average of almost 25,000.
Commenting on the findings, report author and Trinity College Dublin economist Ronan Lyons said: "The fastest increase in housing prices since mortgage market rules were introduced a decade ago highlights the importance of addressing Ireland's chronic and worsening housing shortage.
"The substantial increases over the past year in almost all parts of the country are linked to the lack of second-hand supply. This in turn is related to the increase in interest rates earlier in the decade.
"As interest rates come down and mortgage-holders come off their fixed rate terms, the picture for second-hand supply will improve.
"There are already some tentative signs in Dublin of an increase in second-hand supply. Nonetheless, the second-hand market is only part of the solution. Ultimately, policymakers have to address their failure to recognise and provide the framework for enough new homes each year."
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