House price inflation is ‘stubbornly high' amid supply shortage
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Loading... - Emily Wellington
- 29 Dec 2021
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Housing prices rose an average of 7.7pc in 2021 – in line with the annual average going back to 2015 – amidst ongoing supply challenges in the market. The average price of a home nationally was just under €291,000.
Fewer than 11,500 homes were listed for sale on Daft on December 1, according to the property website – the lowest number since it launched in July 2006 when online advertising was less well
established.
Just 54,000 homes were advertised for sale in the 12 months to December, which was an improvement over every preceding 12-month period going back to the beginning of 2020. However, that total is well below the pre-pandemic level of 2019, when 70,000 were listed.
While price growth in 2021 cooled from a mid-year peak of more than 10pc per annum, report author and Trinity College economist Ronan Lyons said housing inflation “remains stubbornly high”.
“This reflects a combination of unusually strong demand and ongoing weak supply,” he said. “Demand for homes to buy, which had been strong anyway from the mid-2010s, has received an unexpected boost during the Covid-19 pandemic, with prospective buyers able to tap into ‘accidental’ savings, as expenditure fell during the lockdowns. Meanwhile, both new and second-hand supply remain weaker than expected before the pandemic.”
Prices in the main cities, which have driven average prices nationally for several years, grew less than commuter and rural regions as buyers looked beyond urban centres for affordability.
Dublin prices increased by just 3.4pc behind stronger markets in Limerick (6.4pc) and Waterford (7.5pc).
More dramatic increases occurred in Dublin’s Leinster commuter belt, where prices rose by 11.9pc, although the biggest jump was in the long-neglected Connacht-Ulster region, where prices went up by 14.6pc. The area with the highest listing prices, however, remained South County Dublin at nearly €626,000 per home.
According to a Daft survey of 1,000 property market participants taken as part of the sales report, most people expect prices to continue growing, with an average price increase expectation of 4pc.
Despite the clear divergence in urban and rural markets nationwide in 2021, respondents expected similar price changes next year. Read More...
