According to the latest Daft.ie House Price Report, house prices in Ireland have increased by 3.1% in the third quarter of this year.

That’s a 6.2% rise compared to the same period last year and a staggering 37% increase since the beginning of the Covid-19 pandemic.

The most significant increase occurred in Dublin, where prices surged by 4.1% between June and September. 

The report highlights the following average list prices and year-on-year changes for major cities in Q3 2024:

• Dublin City: €463,265, up 6.2%
• Cork City: €354,307, up 3.8%
• Limerick City: €292,437, up 9.7%
• Galway City: €388,604, up 4.1%
• Waterford City: €249,792, up 3.4%
• Rest of the Country: €294,541, up 6.3%

Notably, for the first time since 2020, annual inflation in Dublin has surpassed the average price increases seen in the other major cities. 

While Cork, Galway, and Waterford experienced rises of about 4%, Limerick stands out with a substantial increase of 9.7%.

Declining Supply of Second-Hand Homes

The report also indicates a concerning trend in the availability of second-hand homes. 

As of September 1st, the number of this type of home for sale dropped to under 11,900, showing a 12% decline year-on-year and marking the 15th consecutive month of shrinking supply. 

Over the past year, just over 51,000 homes entered the market, down from nearly 57,000 the previous year.

Ronan Lyons, the report's author and a Trinity College economist, said that this shortage is the crux of the issue. 

"While new home construction has remained stable despite rising interest rates, the second-hand market is experiencing significant weakness," he noted. 

The scarcity of available homes has contributed to rising prices, particularly in Dublin, where second-hand homes sold for an average of 7.6% above their listed prices - the largest gap since records began in 2010.

Future Outlook

Lyons pointed to the slow decline in mortgage interest rates as a potential positive factor for the market, alongside homeowners transitioning off fixed-rate mortgages. 

However, he warned that these elements are largely beyond the control of policymakers.

The underlying issue, he argues, remains the overall lack of housing supply, which should be the primary focus for policymakers leading up to and following the next election.

As the market continues to evolve, the interplay between supply constraints and rising prices will remain a crucial topic in the housing landscape of Ireland.

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