The housing market is "gradually returning to normal" with sales of homes on the increase, according to the country's largest stockbroker Davy, as new sales listings were up 21% on pre-pandemic levels during the third quarter.

An analysis by Davy chief economist Conall MacCoille, said in a note to clients yesterday that sellers appear to be "making up for lost time".

In the first nine months of this year, new listings for sale on property website MyHome.ie stood at 32,800, up about a third on 2021 and just 1% below pre-pandemic 2019 levels.

But they had picked up by the third quarter, when new listings were up 21% on pre-pandemic levels in 2019, according to a report in the Irish Times.

Mr MacCoille said: "The market now appears to be making up for lost time. New listings in the third quarter were 21% above pre-pandemic 2019 levels. We estimate that transaction volumes in the quarter were up 10% on the year and 6% above pre-pandemic third quarter 2019.

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"This improvement in liquidity will also help mortgage lending, which we forecast will grow to €13billion in 2022.

"The loosening in housing market conditions is also evident in the overall stock available for sale on MyHome. This now stands at 16,000, well above the 11,200 trough recorded at the beginning of 2022, albeit still below the 21,000 average through 2017-2019," he said.

"The message here is that conditions are gradually returning to normal."

The Central Bank has estimated Irish house prices might have been 25% higher had the mortgage lending rules restraining loan-to-income ratios not been present, implying prospective homebuyers would have taken on higher levels of debt.

Mr MacCoille concluded: "Irish housing market activity is clearly still recovering from the disruption of Covid-19, for now, resilient to economic uncertainty and the prospect of further ECB rate hikes due to pent-up demand and the healthy labour market.'