Two separate reports indicate that house-price inflation slowed in the third quarter of this year, due a slight pick-up in the number of properties being listed.
Economists have warned, however, that strong demand and tight supply are likely to keep prices rising in the coming months.
Daft.ie and MyHome.ie both reported that asking prices for houses had increased by 9% over the previous 12 months – a slowdown from the 13% annual rises seen in the second quarter.
Drop in Dublin
The Daft.ie report shows that prices in Dublin fell by 0.8% during the three-month period, after four successive quarterly increases. This left the annual increase in Dublin at around 5% – compared with 13% in the rest of the country.
MyHome.ie also found that prices were rising more quickly outside Dublin, with an annual rate of around 10% outpacing the 7.3% seen in the capital.
“The easing of extraordinary price pressures in the sales market reflects the easing of restrictions, and the recovery of, in particular, the second-hand market for homes to buy,” said Trinity College Dublin economist Ronan Lyons, the author of the Daft.ie report.
He warned, however, that availability remained “extraordinarily tight”.
The economist pointed out that the total number of homes for sale nationwide on 1 September was 12,675 – up slightly from the March low of just under 12,000, but not much more than half of the pre-COVID average of 22,500 in 2019.
The author of the MyHome.ie report, Conall Mac Coille (chief economist at Davy) also said that new listings had recovered through 2021, but pointed out that sellers had “only gradually” returned to the market at a time when demand had remained strong.
He added that he was raising his forecast for residential-property inflation for the full year from 8% to 10% because of the report, which he said would provide “little respite” for homebuyers.
“The market is still starved of supply, with prices being bid up aggressively,” he said.
“For a limited pool of 450 properties sold during the summer, we have calculated the transaction price was 6.5% higher than the asking price, compared with a premium of 2.7% in Q2 2021,” the economist added.