A new report indicates that growth in residential property prices accelerated in the final quarter of last year.

The report, from property website MyHome.ie and stockbroker Davy, shows that asking prices in the final quarter of 2021 were 9.7% higher compared with a year earlier.

The figures also show a 1.3% increase in prices compared with the third quarter. The report’s author, Davy chief economist Conall Mac Coille, described this rise as “uncharacteristically sharp”, in a period that it normally quieter.

The annual rate of increase was higher outside Dublin – 10.6%, compared with 7.4% in the capital.

‘Grim picture’

The number of homes listed for sale across the country on MyHome.ie also hit a record low of 11,300 during the quarter.

Mac Coille said that the findings of the report painted “a grim picture” for prospective home-buyers, with little sign of price pressures easing.

“This reflects the market grinding tighter, with the stock of homes listed for sale having fallen to a fresh historic low of just 11,300. In addition, Ireland’s labour market is performing exceptionally well, adding to housing demand,” the economist stated.

He added that the shortage of stock for sale or rental was most acute outside the capital.

Supply too low

Angela Keegan (managing director of MyHome.ie) said that supply was far too low to accommodate the soaring demand for housing.

“It is promising to see construction activity has increased for seven months in a row to November, but the stark reality is that we will unfortunately be living with a dysfunctional property market for some time to come,” she said.

Keegan added that a significant increase in savings among prospective home-buyers meant that it was doubtful that there would be much let-up in demand during 2022.