The limited supply, paired with robust demand will mean double-digit price inflation in the housing market is likely to continue until at least the middle of the year, a stark report has found
And separate research has warned that the number of homes for sale has dropped to the lowest level seen in 16 years.
The latest sales report from property website Daft.ie found just 10,000 homes were listed for sale on March 1, the lowest since July 2006.
By comparison, during 2019 before Covid struck, the average number of homes for sale on the market at any one time was just over 17,500.
A separate report from MyHome.ie found the number of properties for sale on the website fell to 11,200 in March 2022 – down 42% on the figure at the end of 2019.
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The squeeze on supply was most evident outside of Dublin, with the number of properties listed for sale down almost 50% compared with pre-pandemic levels.
According to Daft.ie, housing prices rose by 2.4% on average during the first three months of this year, with the average listed price nationwide in the first quarter at €299,093, up 8.4% on the same period in 2021 and just 19% below the Celtic Tiger peak.
And MyHome.ie found that national annual asking price inflation is now running at 12.3%, standing at 8.6% in Dublin and 14% elsewhere around the State.
The median asking price nationally is now €295,000, while the price in Dublin is €385,000, and €245,000 elsewhere around the country.
And the latest research has warned that price hikes are only set to continue, according to a concerning forecast by the property website. MyHome.ie report author, Davy stockbrokers’ chief economist Conall Mac Coille, said double-digit inflation is now likely to persist until at least the middle of the year.
"The broad picture of the market in early 2022 remains similar to last year: impaired supply coupled with robust demand due to Ireland’s strong labour market," he said.
The Daft.ie report showed price percentage increases are lower in urban areas, compared to rural areas, although the gap is narrowing. In Dublin, Cork and Galway cities, prices in the first quarter of 2022 were roughly 4% higher on average than a year previously, while in Limerick and Waterford cities, the increases were 7.6% and 9.3% respectively.
Outside those five cities, prices rose by an average of 12.3% in the year to March 2022. Daft.ie report author Ronan Lyons said if Covid-19 has done anything to the housing market in Ireland, it has been to take a housing shortage that was concentrated in urban areas and spread it across the country.
"There has been significant commentary about the impact of Covid-19 on the construction of new homes – and rightly so, given the need for at least 35,000 new homes per year and closer to 50,000 if we are to have the right mix of housing to suit our needs.
"In that context, it is unfortunate that Covid-19 hit the construction sector just as it looked as though the number of completions would increase beyond the 20,000 threshold."
"Since 2019, the sector has been somewhat stuck at this level, although the expectation is that this year may see as many as 27,000 new homes built across all three main tenures: sale, market rental and social rental," he said.
