The number of houses available to buy is at a 14-year low, with lack of supply ensuring prices continue to rise despite the pandemic.
A shortage of available homes has pushed up the average cost of buying by almost 5pc nationwide in the third quarter, according to the latest Daft.ie report. The jump in prices offsets falls earlier in the year and means the average sale price nationwide is €263,750. This is up 2.7pc on the same period in 2019 and 60pc higher than its lowest point in early 2013.
But the report shows the number of properties available to buy on the market nationwide was just under 17,700 on October 1. This is down by almost one third year-on-year and the lowest figure in more than 14 years.
While stock on the market had improved between April 2018 and August 2019, the number of of homes available has now fallen for 14 successive months – with relatively similar falls in all major regions of the country.
Report author Ronan Lyons, an economist at Trinity College Dublin, said: “The jump in listed sale prices seen in the third quarter of 2020 is not entirely unexpected.
“Indeed, it brings the Irish housing market into line with many other housing markets in high-income countries, where Covid-19 has not disrupted the long-term upward trend in housing prices.
“In Ireland’s case, the collapse in listings in April and May has translated into a fall in stock on the market – with fewer than 50,000 homes advertised for sale in the year to September, the lowest total since the start of 2015.
“This highlights the underlying issue affecting the Irish housing system – a prolonged and worsening scarcity.”
He said there was still hope that the significant fall in home completions to be registered this year may be a ‘temporary blip’ amid the Covid pandemic.
“Nonetheless, the level of new-home construction even in 2019 was barely half of underlying need. While the public health emergency clearly dominates policymaker attention currently, longer-term challenges should not be forgotten. Chief amongst these is the lack of housing – especially for smaller households, in or close to Ireland’s largest cities and towns.”
He said it must be borne in mind that this was a year like no other.
“Across both sale and rental markets, setting aside supply, the single best predictor of changes in housing prices is the unemployment rate,” he said.
“Where it rises – and thus when household income and net migration fall – the price of housing falls. But not this time.”
“Figures from this latest Daft.ie report, covering the sales market, show a notable bounce in the listed price of housing across Ireland in the third quarter of the year.”
Prices rose in all 54 markets listed in the report between June and September, although there were significant differences around the country.
The largest increases were in urban areas, with prices in Waterford city rising 11pc, Galway city 10pc and Cork and Limerick 9pc in the space of just three months.
By comparison, prices in Dublin rose by an average of 2.2pc.
Outside the cities, the average increase in these three months was 5.8pc – with larger increases in Leinster (7.3pc) and smaller increases in Connacht-Ulster (3.5pc).