One in seven homes are selling at 20% above the asking price.

The current average sold price is €425,500 – which, prior to a rise of 20%, or more than €70,000, would have gone on the market for around €355,000.

The startling figures were revealed in Bank of Ireland’s Economic Research Unit report, which also shows transactions in January and February were up 3% on a year ago.

There were just 61,000 sales last year, due to the lack of homes for sale.

A shortage of existing stock is preventing market liquidity from picking up.

Homes sold for almost 8% above the asking price in the first three months of the year, because of intense competition among buyers.

It comes as Daft.ie, last week, reported house price inflation nationally has risen 3.7% this year to date and 11.6% since last March.

Homes listed on the property website during the first three months of the year had an average price of €346,048, which is also 35% higher than prior to the onset of the Covid pandemic.

The current rate of inflation is the second-highest on record in the decade since mortgage market rules were introduced, exceeded only by the 11.7% spike seen in early 2017.