Asking price inflation for properties at 6.5%

Prices being sought for properties here are rising at their fastest pace in 18 months, according to an analysis by the property listings website, MyHome.ie.

Its latest study, carried out in association with Bank of Ireland, captures annual asking price inflation nationally running at 6.5% in the first three months of this year.

That was the highest rate of growth in list prices since the late summer of 2022.

The analysis points to renewed momentum in the Dublin market, where the rate of increase in asking prices accelerated to 7.2% in the year to the first quarter compared to 5.5% in areas outside of the capital.

The study suggests that those selling properties are currently achieving in excess of the asking price, with houses being sold – at the median – for 4.6% over the original price sought.

That compares to a 1% margin above-asking a year ago.

Just under 1% of homes listed for sale on MyHome.ie cut their asking prices to secure a sale in the first quarter.

That was a new record low and indicative of the tight housing market.

“The message from this quarter’s MyHome.ie report is that the housing market is heating up again. MyHome asking prices rose by a solid 2% in the first quarter, with the annual inflation rate accelerating to 6.5%, its fastest pace in 18 months,” Conall MacCoille, Bank of Ireland Chief Economist and author of the report commented.

“Notably, Dublin – where valuations had become most stretched during the pandemic – is joining in the rebound,” he added.

Homebuyers – first time purchasers and movers – accounted for 71% of transaction volumes in 2023, the figures show. That was the highest proportion in a decade.

The data shows strong demand from the state for social and affordable housing is being offset by the decline in purchases from institutional investors into the private rented sector.

The market continues to be driven by a supply shortfall with the stock of housing for sale hitting a fresh record low of 10,935, representing a reduction of almost a fifth in the year.

“This is below even the Covid-19 trough of 11,200, and down 19.5% on the year,” Conall MacCoille noted.

On a more optimistic note, housing starts in the first two months of this year were up 72% on the same time in 2023.

Mr MacCoille pointed out that the 63,000 residential transactions recorded in 2023 was the highest number recorded since the Property Price Register started collecting data in 2010.

“In absolute terms housing supply is slowly improving, but the gap with robust housing demand is growing,” he said.

“In summary, there has been no let-up in demand, and with the supply situation still difficult, it is not too surprising that house price inflation has regained momentum. We expect to see a mid-single digit rise in Irish house prices in 2024, close to 4%,” he concluded.