House prices rising by €100 a day and showing no signs of slowing down

The Q1 Irish Independent REA Average House Price Survey has found that average house prices rose by 3.16pc nationally in the first three months of the year, matching the 1pc-a-month increases experienced during the boom.

Almost 60pc of all purchasers were first-time buyers, a figure which rose to 76pc in Dublin as people with mortgage approval scramble to get a foothold on the housing ladder.

Two other property price surveys, released from Daft.ie and MyHome.ie, also show a continued property market squeeze with rising asking prices nationwide.

The Irish Independent REA Average House Price Survey concentrates on the actual sale price of Ireland’s typical stock home, the three-bed semi. This is intended to provide an accurate and up-to-date picture of the second-hand property market in towns and cities countrywide.

Today’s report shows that the price of a three-bedroom semi-detached house across the country rose by almost €9,000 over the past three months to €278,500. That’s the equivalent of about €100 every day.

There has been an annual increase of more than 14pc, closing in on the €300,000 average level at the height of the boom in 2006.

There continued to be big price rises in counties outside of major urban areas, amid a new focus on working-from-home brought on by the Covid pandemic. Actual selling prices in Dublin, however, remain highest at an average of €481,250.

“We are now approaching and, in many cases, exceeding Celtic Tiger prices in the capital, with the market being driven by frustrated first-time buyers,” said REA spokesperson Barry McDonald.

“Despite signs of a rise in available stock over the last couple of weeks, sale prices are still increasing at all price ranges.

“Affordability is now key, and the highest growth levels are being experienced in areas where homes are available for less than the average county figure.”

The country’s other major cities saw rises of 2.2pc on average, mostly in line with Dublin, while Waterford c ity returned a 6pc price increase with the average three-bed semi up €15,000 to €265,000, driven by high demand from outside buyers.

Counties in Dublin’s commuter belt saw prices increase of 4.47pc, or an average €13,000 to €305,000. This was double the rate of increase seen in the capital.

In the rest of the country, where prices rose 3.4pc to €196,569 on average, the survey found that one in every three buyers were from outside the county as new working conditions enable a rethink on home bases.

In Carrick-On-Shannon in Leitrim, two-thirds of purchasers are new to the area, according to REA Brady, Carrick-on-Shannon.

There were significant price rises in counties Cavan (8.3pc), Mayo (8.2pc) and Galway (8.7pc) where agent REA McGreal Burke has noted the return of younger generations to rural Ireland, bringing with them increased purchasing power.

Meanwhile, 75pc of house sales were to first-time buyers in Cavan town. Homes there rose €15,000 in three months to €175,000 and sales were being agreed in an average of two weeks, according to REA Peter Donohoe. In Killarney, agents REA Coyne and Culloty are reporting just 19 houses for sale amongst all estate agents in the town – the lowest figure on record, with no new developments coming on stream.

It comes as housing prices rose by 2.4pc on average during the first three months of 2022, according to the latest Daft.ie Sales Report released today.

It says the average listed price nationwide in the first quarter of 2022 was €299,093, up 8.4pc on the same period in 2021 and just 19pc below the Celtic Tiger peak.

Just 10,000 homes were listed for sale on March 1, another new low in a series stretching back to July 2006.

Ronan Lyons, economist at Trinity College Dublin, said: “Inflation in housing prices remains stubbornly high – with Covid-19 disturbing an equilibrium of sorts that had emerged, with prices largely stable in 2019 but increasing since.

“As has been the case consistently over the last decade, increasing prices reflects a combination of strong demand and very weak supply.

“Both new and second-hand supply remain weaker than expected before the pandemic. Combined with unexpected strong demand, due to accidental savings during lockdown, this has driven up prices.

“Additional supply – of all types of homes, for sale but also market rental and social rental housing – remains the only real solution to solving Ireland’s chronic housing shortage.”

And a separate report from MyHome.ie/Davy also suggested no let-up in the property market squeeze for the first quarter of the year. It has national annual asking price inflation now running at 12.3pc.

Conall MacCoille, c hief e conomist at Davy, said that double-digit inflation was now likely to persist until at least the middle of the year.

“The broad picture of the market in early 2022 remains similar to last year: impaired supply coupled with robust demand due to Ireland’s strong labour market.”