Asking prices for Irish homes climb 6.7% in second quarter amid supply shortfall

Asking prices for Irish homes rose at an annual pace of 6.7 per cent in the second quarter, as demand continues to far outstrip supply, according to Daft.ie.

The property company’s latest housing report said that the average listed price nationwide in the quarter was just under €340,400. That is some 35 per cent above where prices were at the onset of the Covid-19 pandemic in early 2020.

While Dublin listing prices rose by 4.7 per cent on the year, the advance was closer to 10 per cent in Cork and Waterford cities and more than 12 per cent in Limerick and Galway cities.

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Prices were up 6.1 per cent in Leinster outside Dublin, 10.4 per cent in Munster and 6.2 per cent across Connaught and Ulster, Daft said.

Since the start of the year, there have been consistently fewer than 12,000 secondhand homes available to buy. The only other time the market has been as tight, in a series of reports extending back to 2007, is the period January-May 2022.

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“The tightness in availability has put upward pressure on housing prices. Inflation had peaked in late 2021, as a glut of savings found its way into the housing market,” said Ronan Lyons, an economist at Trinity College Dublin and author of the Daft report. House price growth was running at an annual rate of 13 per cent in late 2021.

“Where it goes next will depend on how fast secondhand supply recovers,” he added.

Tight supply in the secondhand market also reflects what is happening in the new housing market, where home completions are currently running at an annual pace of about 33,000.

While Taoiseach Simon Harris recently outlined a target for an average of 50,000 new homes to be delivered a year, stockbrokers Davy said in a report last week that the State needs almost 85,000 new homes a year to address the structural shortfall in housing and the expected population growth over the next 10 years.

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Davy said it expected the Republic’s population to grow to 5.9 million by 2030, which would be 524,000, or 10 per cent, ahead of the Government’s National Planning Framework (NPF) baseline of 5.36 million.

The latest official house price figures from the Central Statistics Office show that actual sale prices increased by 7.9 per cent in the 12 months to April, with Dublin prices rising 8.3 per cent and those outside the capital advancing 7.6 per cent.