Asking prices for homes increased 9% in the third quarter, but the rate is falling

Wanted home prices in the third quarter rose 9% nationwide compared to the same period last year.

This is according to two separate reports from real estate websites Myhome.ie and Daft.ie and compares to a rate of 13% in the second quarter of the year, indicating a moderate rate of increase.

“The latest signals from the sales market are that the worst of the Covid-19 pressure is over,” said Ronan Lyons, economist at Trinity College Dublin and author of the Daft.ie analysis.

The MyHome.ie report had the highest claim rates in Dublin at 7.3% in the July-September period compared to the same three months in 2020.

However, Daft.ie analysis places the price growth rate in the capital at 4.9%.

MyHome.ie calculated that the inflation rate outside Dublin was around 10.1% during this period.

That’s compared to Daft.ie’s estimate, which puts the increase for the quarter outside major cities at 12.9% year over year.

Despite the differences in the findings of the two reports, both agree that the rate of residential property price inflation continues to be driven by a chronic shortage of supply and rising demand.

« The market remains supply-deprived, with homebuyers aggressively raising prices, » said Kunal McCwell, chief economist at Davey and author of the MyHome.ie report.

“This behavior is evident in transactions that settle well above asking prices. For a limited group of 450 properties sold during the summer, we calculated that the transaction price was 6.5% above the asking price, compared to a premium of 2.7% in Q2 2021. « 

The MyHome.ie report said there are currently 13,500 properties for sale on its site, up slightly from 12,700 in the second quarter but still well below the 20,000 pre-pandemic.

Daft.ie found that on September 1, the total number of properties available for purchase was just under 12,700, a slight increase from levels recorded earlier in the year, but still one of the lowest numbers recorded since the advent of advertising properties for sale online.

It said the total nationwide availability of homes for sale on that date was a third lower than the same date a year ago and just over half the amount for sale in September 2019.

“Inflation has eased a bit, and there has been a modest improvement in the number of homes available for purchase at any one time,” Lyons said.

“However, while the Covid-induced surge in market conditions may pass, the underlying issues remain.”

“Inventory for sale remains well below pre-Covid-19 levels, while many parts of the country are still seeing prices at least 10% higher than they were a year ago.”

« Additional supply remains the key to resolving Ireland’s chronic housing shortage, and with the pandemic under control, housing remains a critical problem – both economically and politically – that policymakers must address. »

According to Daft.ie, the median listing price for a home nationally between July and September was €287,704, 22% less than the Celtic Tiger.

In Dublin, the average asking price in the third quarter was 399,323 euros, up 4.9% from the same period last year – the slowest rate of inflation in a year.

This compares to €230,585 in Limerick, but there is an inflation of 8.4%.

In Cork City, the average cost of a home was €307,464 during this period, an increase of 5.8%, while in Galway the rate of increase was 3.1%.

Daft.ie found that the fastest price hikes were in Mayo and Leitrim.

MyHome.ie found that the average asking price for new sales nationally is now €308,000, while in Dublin it is €414,000 and elsewhere across the country at €260,000.

In light of the latest data, McQuayle said, Davey raised his forecast for real estate price inflation at the end of this year to 10% from 8%.

The drop in the supply of new homes on the market was astonishing if not surprising, said the Institute of Professional Auctions and Appraisers (IPAV).

“Given supply constraints and very strong demand, it is likely that prices achieved for homes in many areas have in fact exceeded asking prices, the latter being captured by the Daft.ie report,” said Pat Daft, CEO of IPAV.

« Our study of actual prices achieved by auctioneers in the first six months of 2021 over the last six months of 2020 finds an acceleration in house price increases especially in the country. »

However, he said, agents across the country are now reporting more used properties coming to the market.