The cost of buying a home is set to rocket because of an acute shortage of properties coming to the market, it was revealed today.
And the situation could get worse this year as buyers are willing to pay more because they’ve saved cash over lockdown.
It has emerged that annual asking price inflation rose by 6.3% nationally and by 4.8% in Dublin – the fastest rate rise in almost three years.
The shock increase in house prices confounds warnings made early last year that Ireland’s property market could suffer “double-digit” price declines because of the economic impacts of the pandemic.
The figures from MyHome.ie published in association with Davy show the average asking price nationally was €284,000 and €392,000 in Dublin.
Overall, asking price inflation rose by 6.3% nationwide, by 4.8% in Dublin and by 7.2% elsewhere around the country.
The study found prospective home buyers have largely been insulated from job losses due to Government supports which protected incomes and removed the risk
of forced selling.
The report also revealed mortgage lending hit a new cycle high of €1.1billion in October while at the same time housing supply issues have become more acute.
The author of the report and chief economist at Davy, Conall MacCoill, said further house price increases were now likely this year.
He added: “This quarter’s MyHome report points to an acceleration in annual asking price inflation to 6%, the fastest pace in almost three years.
"This pressure has not yet turned up in transaction prices, although the Central Statistics Office Residential Property Price Index rose by 0.5% in October, the sharpest monthly rise in over a year.
“It is probably only a matter of time before the official measure of house price inflation accelerates.
“As we head into 2021, home buyers have saved additional funds to purchase homes, with sentiment helped by the likely recovery in the economy as vaccines are disbursed.”
MyHome.ie chief Angela Keegan said that despite dire warnings last year, the property market is in much better shape than expected.
She added: “The property market mirrors the overall economy, and we are in a much better place now than we may have expected to be early in 2020 when the virus emerged.”
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