House asking prices have jumped by an average of 12.3% over the past year, reaching €357,851, according to the latest House Price Report from Daft.ie, reports RTE.
This surge marks the highest rate of house-price growth since the Central Bank introduced mortgage-lending restrictions back in 2015.
Those rules, which continue to apply, cap how much buyers can borrow based on their income levels and the value of the home they wish to purchase, reports RTE.
The property site reported that asking prices nationwide rose by 3% between April and late June this year, and now sit 40% higher than they were at the beginning of the Covid-19 pandemic in 2020.
The report shows that since last year, asking prices in Dublin have climbed by the national average of 12.3%, reaching €467,913. Similar increases were seen in Limerick city (+12.8% to €311,086) and Galway city (+12.5% to €426,348), reports RTE.
However, Waterford city has seen even sharper growth with asking prices rising 15.2% year-on-year to €276,420. Cork experienced a more moderate increase of 8.6%, bringing average prices there to €369,938.
Daft attributed the sharp rise in house prices to a significant shortage of available properties, reports RTE.
It stated that the number of second-hand homes listed for sale nationwide at the start of June was approximately 12,100—a figure that is largely unchanged from a year earlier and less than half of the pre-Covid norm of nearly 25,000.
Commenting on the report, economist Ronan Lyons of Trinity College Dublin said: “The fastest increase in housing prices since mortgage market rules were introduced a decade ago highlights the importance of addressing Ireland’s chronic and worsening housing shortage, reports RTE.
“The substantial increases over the past year in almost all parts of the country are linked to the lack of second-hand supply. This in turn is related to the increase in interest rates earlier in the decade. As interest rates come down and mortgage-holders come off their fixed rate terms, the picture for second-hand supply will improve. There are already some tentative signs in Dublin of an increase in second-hand supply. Nonetheless, the second-hand market is only part of the solution. Ultimately, policymakers have to address their failure to recognise and provide the framework for enough new homes each year,” reports RTE.
The Tánaiste has said he remains unconvinced that offering tax incentives to property developers is the best strategy for boosting housing supply.
Simon Harris acknowledged that further steps are necessary to make homebuilding a more feasible option, reports RTE.
He added that the upcoming National Development Plan will be the next major initiative in housing policy, with a particular emphasis on enhancing infrastructure, especially for water and wastewater treatment.
Labour’s Housing Spokesperson Conor Sheehan argued this morning that the crisis is not something that had to happen, reports RTE.
“It is the direct result of bad political choices, year after year. We need a complete overhaul of Ireland’s broken housing system. Families, workers and young people deserve secure, affordable homes,” he said.
Sinn Féin’s junior Housing Spokesperson Thomas Gould said the decade-high rate of house price inflation shows that the Government still lacks a clear strategy for housing affordability, reports RTE.
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