Average home prices rose by 3.8% in the second quarter of this year, the largest three-month gain in nearly two years, while the stock of homes increased slightly, property website Daft.ie’s latest report shows.
Daft’s latest sales report for the three months from March to June also reveals that the average listed price nationwide in the second quarter of 2022 was €311,874.
This marks an increase of 9.5% on the same time in 2021 and is just 16% below the Celtic Tiger peak.
In its latest report, Daft noted that the rural-urban gap in housing inflation continues to narrow, although rural areas are still seeing the largest increases.
Outside the cities, housing prices rose by 11.4% in the year to June, down from a peak rate of inflation of 16.8% a year ago.
In Dublin, the year-on-year change in prices was 6.6%, compared to 3.4% at the end of 2021.
But the other cities have seen larger increases in prices with Cork prices up 9.4% on the same time last year while Limerick city prices were up 11.1%.
The biggest increases in urban housing prices were in Galway with a rise of 13%, while Waterford home prices jumped by 13.5%.
Today’s report also shows that the number of homes available to buy on June 1 stood at just over 12,400, up from an all-time low of just 10,000 three months earlier.
There are now slightly more homes available to buy in Ireland than a year ago, the first time since the middle of 2019 that this has been the case.
As in 2019, improved availability is being driven by Dublin, where stock for sale is up 4.5% year-on-year. Stock in the rest of Leinster is up 10.8%.
The report’s author Ronan Lyons, economist at Trinity College Dublin, said the country’s housing market has been characterised for a number of years by strong demand, boosted recently by unexpected savings, but supply that has been steadily weakening.
“There are some signs that both sides of the market may be turning. On the supply side, the number of homes listed over the last 12 months has increased by 30% since early 2021, although it still remains 15% below the peak in 2019, while construction of new homes is set to reach a post-Celtic Tiger high this year,” Mr Lyons said.
“On the demand side, the rise in interest rates, prompted by inflation, will feed through to housing demand in due course,” the economist said.
“At the same time, sentiment among those active in the housing market has eased back, with expected inflation in housing prices over the next year below 1%, compared to over 5% three months ago,” he said.
“Expected inflation is one of the key drivers of immediate housing demand, so if prospective buyers feel they have more time to choose, they may take that opportunity,” he added.
Ronan Lyons noted a rise in housing price pressure in Dublin, adding that prices are now roughly 6.5% higher than they were a year ago.
This means that inflation rates in Dublin has doubled since the start of the year, he said, and roughly half of that increase was over the last three months alone.
Speaking on Morning Ireland, Ronan Lyons said the highest increases continue to be in rural areas with average inflation increases of around 11%.
He said that asking prices are still increasing due to the ongoing problems between supply and demand.
Ronan Lyons also said that the flow of homes coming onto the market has improved “quite a bit” and there are now more homes available across Leinster than there were a year ago.
But he said Ireland has a structural problem with a lack of housing.
The build to buy scheme was created with good intentions but that it ultimately pushed up the prices in some places, he added.
Surge in landlords selling up increases house supply – REA
Meanwhile, new figures from REA show that actual selling prices in Dublin postcode districts have risen by 2.5% in the past three months, to an average of €493,333.
But the annual rate of increase has dropped two percentage points to 8% on the previous survey, REA’s Average House Price Index for the second quarter of this year shows.
Today’s latest index shows that areas in North County Dublin – such as Swords, Skerries and Balbriggan – have seen prices increases soar to 22% annually, as Dubliners seek a more affordable home within the county.
REA said that an upsurge in private landlords selling their properties nationally has increased supply levels and tempered price rises in some areas.
Up to 30% of houses for sale in some areas of Dublin are now due to landlords selling their additional properties, with knock-on effects for the rental market, the survey found.
The REA Average House Price Survey concentrates on the actual sale price of Ireland’s typical stock home, the three-bed semi.
It shows today that the price of a three-bedroomed semi-detached house across the country rose by 2.9% over the past three months to €286,611, an annual increase of 13%.
58% of all purchasers in the past quarter were first-time buyers, according to REA, a figure which rose to 78% in Dublin as people with mortgage approval scramble to get on the housing ladder.
“At around the €410,000 mark, second hand homes are coming to the market in greater numbers in areas like Lucan and Bray in Co Wicklow,” said REA spokesperson Barry McDonald.
“This is taking the urgency out of the market in these locations, as buyers feel that they have some options. However, this easing is only being seen in areas where there are new homes,” Mr McDonald said.
“Elsewhere supply remains a major issue. Interest rate rises and inflation fears are giving buyers some pause for thought but neither of these issues can temper the pent-up demand of mortgage approved buyers,” he said.
“However, the biggest factor on the market in the last quarter is the increasing proportion of sales from private landlords, and the effects that it is having on the market,” he added.
Today’s index shows that commuter counties saw prices increase by 2.3% – a jump of €6,833 to €311,833.
In the rest of the country, where prices rose 3.2% to €202,897, the survey found that one in every three buyers were from outside the county, with 50% first-time purchasers, as new working conditions enable a rethink on home bases.