House price growth accelerates to fastest level in 2½ years

House prices rose at an annual rate of 6.9 per cent in June, the fastest level of growth seen in 2½ years. This was up from 5.4 per cent the previous month.

Central Statistics Office (CSO) figures show the State's property market continues to be stoked by pandemic-related factors, such as increased savings and lower-than-anticipated supply.

Prices in Dublin rose by 6.4 per cent on an annual basis in June, the fastest level of growth seen in the capital in three years, while prices outside Dublin rose 7.4 per cent.

Many had predicted property values would decline as a result of the pandemic but a number of factors – increased savings, home working and expatriates returning from London after Brexit – have led to an acceleration prices.

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Transactions

The CSO said the number of property transactions in June rose month on month by 8.3 per cent to 3,473. The total value of transactions filed with Revenue was €1.1 billion.

Existing dwellings accounted for 85 per cent of the homes purchased, while the balance of 15 per cent were new dwellings.

The figures show households paid a median or middle-range price of €265,000 for a home in the Republic over the past year. The Dublin region had the highest median price at €395,000.

Within the Dublin region, Dún Laoghaire-Rathdown had the highest median price (€555,000), while Fingal had the lowest (€360,000).

The highest median prices outside of Dublin were in Wicklow (€365,000) and Kildare (€329,950), while Leitrim and Longford had the lowest (€120,000).

IPAV, the Institute of Professional Auctioneers and Valuers, said the rising prices of recent months are likely to continue for the foreseeable future until supply improves.

Chief executive Pat Davitt said: “Unfortunately the divergence between supply and demand is enormous and is unlikely to change in any meaningful way in the near future.

“In fact supply is so tight that in some cases would-be sellers are not putting their homes on the market, lest they may not be able to find a suitable property to buy or that by the time they do prices may have moved beyond their budgets.”

Trevor Grant, chairman of the Association of Irish Mortgage Advisors (AIMA) said: “Today’s figures reflect the strong demand across Ireland’s property market and the months of stalled building.

“With most sites back up and running, we would hope to see an increased supply of new homes coming on stream later this year. That said, there are still too many developments caught in planning limbo and that is something that requires urgent action by Government,” he said.