House prices rose by 7.6% on average in the last 12 months, according to a new report.
New figures in the latest House Price Report from Daft.ie show that the national average asking price in the third quarter of 2016 was €221,000, compared to €205,000 a year ago and €164,000 at its lowest point.
While annual inflation in Dublin at 5.3% remains significantly below the rate elsewhere in the country (9.3%), the new figures show a change in the Dublin market, where inflation had been below 3% for a year.
In Dublin, prices have risen by an average of €102,500 – or 46.5% – from their lowest point in mid-2012.
Outside the city, the average increase has been €48,600, or 36%, since the end of 2013.
Compared to the same period in 2015, prices in the third quarter of 2016 were 10% higher in Cork and 12% higher in Galway.
In Limerick city, the increase was 14%, while in Waterford prices rose by 16% in 12 months. Inflation outside the cities varies from 7% in Munster to 11% in Connacht-Ulster.
The total number of properties for sale nationwide has been largely stable since the start of the year. There were just under 24,900 properties for sale in September, slightly below the June figure and slightly above the total for March. Nonetheless, compared to a year ago, supply continues to tighten, with 14% fewer homes available.
Commenting on the figures, Ronan Lyons, economist at Trinity College Dublin and author of the Daft.ie Report, said: “The latest figures are a cause for concern.
“There were price increases throughout the summer in all 54 markets covered in the report, only the second time this has occurred since prices bottomed out. Increases occurred throughout Dublin, which had seen almost two years of price stability following the Central Bank rules.
“This suggests that, while there is little risk of a credit-fuelled bubble, the underlying lack of supply is severely affecting the market.”
The website MyHome.ie has also published details of a home-buyers survey, which show people are waiting to see what sort of grant scheme or tax-relief measures the Government announces in the next budget.
A first-time buyers grant for newly built houses is thought to be imminent.
The author of the report and chief economist at Davy Conall MacCoille said it was clear that following a busy summer trading period asking prices were now cooling as we head into the autumn months.
“The big picture is that the lack of housing supply is now clearly hurting transactions,” he said.
“In the first eight months of this year transactions are down 5% on 2015, albeit with some recovery in August. Clearly there are few constraints from the mortgage market with €1.8bn of approvals in the three months to August.
“Instead growing numbers of borrowers are chasing a diminishing pool of homes listed for sale. Competition amongst buyers is intense and this has driven ‘sale agreed times’ to a fresh low of 4 months – 3.3 months in Dublin and 4.5 months outside the capital.”
