The lack of new homes being built due to lockdowns, lies behind increasing house prices according to Sherry Fitzgerald, with average selling prices rising 1.5% across the country in Q1 2021.

The increase compares to 0.1% in the same period a year earlier.

Managing director Marian Finnegan said: “The national lockdown continues to weigh on the Irish housing market. The tightening of restrictions since the start of the year has temporarily limited the market’s ability to replenish supply. 

“This has resulted in a rise in price inflation compared to the more subdued levels of growth observed last year.  That said, it is anticipated that the supply of second-hand property will improve once restrictions are lifted, which should facilitate a stabilisation in the pace of growth as the year progresses.”

Transaction activity was robust in the closing months of 2020, with almost 16,900 home sales recorded in the final quarter of last year. This was the strongest level of quarterly sales in over a decade. Overall, just under 46,200 home sales were recorded on the Property Price Register in 2020, excluding multi-family/portfolio sales and new homes acquired for social housing.

In Association with

For 2020, the number of transactions in Dublin fell by 22% compared to 2019, with approximately 13,500 dwellings changing hands in the year. Cork, Limerick and Galway all noted similar levels of decline, at approximately 16% year-on-year.

Activity levels in the new homes market suffered an even greater decline. Approximately 7,600 new home sales were recorded through 2020, a decrease of 20% year on year, with new home sales falling by 33% in Dublin. In contrast, there were c.38,600 sales in the second-hand market, a reduction of 16% annually.

And people, it seems, want to live ‘somewhere else’ in greater numbers. Nationally, 20% of vendors who sold through Sherry FitzGerald in Q1 2021 stated that their reason for selling was to relocate somewhere else in Ireland, up from 15% in the same period in 2020.

Owner occupiers predominated among buyers —  79% of all purchasers in the first quarter, with first-time buyers accounting for 54% of all these. Investor buyers are leaving the market, the figures indicate, as 29% of vendors were investors selling a property, while just 13% of buyers were investors.