The Q3 2021 report, in association with Davy, found that annual asking price inflation rose by 9% nationwide, by 7.3% in Dublin and by 10.1% elsewhere around the country.
Meanwhile, quarterly asking price inflation also rose slightly throughout Ireland – by 1.5% nationally, by 0.5% in Dublin, and by 2.3% elsewhere around the country.
This means the mix-adjusted asking price for new sales nationally is now €308,000, while the price in Dublin is €414,000 and elsewhere around the country it is €260,000. Newly listed properties are seen as the most reliable indicator of future price movements.
The author of the report, Conall MacCoille, Chief Economist at Davy, said that the findings of the report would provide little respite for homebuyers.
“The market is still starved of supply, with prices being bid-up aggressively by homebuyers. This behaviour is evident in transactions being settled well above asking prices. For a limited pool of 450 properties sold during the summer, we have calculated the transaction price was 6.5% higher than the asking price, compared with a premium of 2.7% in Q2 2021.
“Hence, we have decided to raise our forecast for residential property index inflation at end-2021 to 10% from 8% previously.
“Unfortunately, there has been only a marginal improvement in housing market conditions for homebuyers. There are currently 13,500 properties listed for sale on MyHome.ie, up only slightly from 12,700 in Q2 2021 and still well down on circa 20,000 pre-pandemic. Although new listings have recovered through 2021, the underlying picture is that vendors have only gradually returned to the market whereas demand has remained robust.
He added that although homebuilding was ahead of expectations, “given population growth is adding 30,000 units at a minimum each year, coupled with circa 100,000 units of latent demand built up over the past decade, it will take some time before homebuilding can start to address the housing shortage”.
Angela Keegan, Managing Director of MyHome.ie, said: “While the annual inflation hike for Q3 is not as high as the previous quarter, it is clear that the property market is still significantly overheated, and that we are some way off towards redressing the imbalance between supply and demand.
“As always, we believe that demand and supply need to be balanced, and as such we are calling for a major increase in construction activity into 2022 and beyond. Now that the pandemic appears to be receding, this is something we can realistically hope for.”
Full details of the report can be found at www.myhome.ie/reports
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