House prices are expected to increase by at least 10pc next year as economists warn Ireland’s housing crisis won’t be solved any time soon.
Asking prices for houses in Dublin jumped by almost €40,000 in the last 12 months – or by around €107 each day – according to MyHome.ie.
Meanwhile, prices around the country leapt by €21,000, or just over €57, each day.
It means the median asking price for a home in the capital now stands at €366,000, while elsewhere around the country the figure is €253,000.
In its latest Q3 property report, the website said asking prices for newly listed properties in Dublin rose by 1.6pc in the period July to September, and is up 11.8pc in the last 12 months.
Nationally prices rose by 0.4pc in the third quarter of this year and are up 8.9pc year on year.
However, author of the report Conall Mac Coille, chief economist at Davy, said there is no let up in sight and predicts the acceleration in asking prices, which began in late 2016 and has continued in 2017, will continue into 2018.
“At the start of the year we predicted double-digit growth in house prices for 2017, but due to the strength of asking price inflation in Q3 we are predicting that double-digit inflation is also likely to persist through 2018,” said Mr Mac Coille.
He said there were a number of reasons why prices are rising so rapidly, including a lack of supply, the economic recovery and a rise in household incomes of between 2pc and 3pc a year.
“However, the key factor driving house prices higher has been the mortgage market. The average loan drawn down by first-time buyers in the last quarter was up 9.4pc in the year to €200,000, from €183,000 in mid-2016.
“This has meant that leverage on new mortgage loans has increased and with ever more desperate buyers seeking larger loans as they compete for the few properties listed for sale, this trend is set to continue and to ensure inflation remains at double-digit level,” he added.
The number of homes listed for sale on MyHome.ie has tumbled by 6.5pc in the past year to 21,424. This represents just 1.1pc of the total housing stock of two million homes. In a functioning market turnover of 4pc of the housing stock is typical.
A new report from Goodbody Stockbrokers has also warned the level of housebuilding is substantially below what official data suggests.
It said that, based on Building Energy Ratings (BER), 5,377 houses were completed in 2016, only about one-third of the number indicated by official completions data, which are calculated from electricity connections.
“That means housebuilding supply has much further to go to meet current and future demand,” Goodbody said.
It said new housebuilding is growing rapidly in Ireland, albeit from a low base. In the 12 months to August, completions amounted to 7,719, up 75pc year on year.
“On current trends, completions will total less than 10,000 units, roughly half the estimates suggested by the alternative electricity connections data,” the report said.
It said 72pc of the new homes completed were in the Greater Dublin Area in the year to date.
Semi-detached homes remain the most popular type, accounting for 41pc of new completions. Terraced homes accounted for 23pc of the new build and apartments just 15pc.
Meanwhile, the latest Daft.ie quarterly report found the national average list price is now almost €241,000, 8.9pc higher than a year ago. It means prices have risen by almost 47pc on average from their lowest point in late 2013.
It said the average list price in Dublin City now stands at €354,765, up 9.9pc; Cork City €260,181, up 5.1pc; Galway City €271,797, up 9.2pc; Limerick City €177,771, up 8.6pc, and Waterford City €159,992, up 8.5pc.
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