The sale price of homes in Ireland rose by 3.8% on average between March and June 2022, the largest three-month gain in nearly two years, according to the latest Daft.ie Sales Report. The average listed price nationwide in the second quarter of 2022 was €311,874, up 9.5% on the same period in 2021 and just 16% below the Celtic Tiger peak.
The rural-urban gap in housing inflation continues to narrow, although rural areas are still seeing the largest increases. Outside the cities, prices increased by 11.4% in the year to June, down from a peak rate of inflation of 16.8% over the same period. In Dublin, the year-on-year change in prices was 6.6%, compared to 3.4% at the end of 2021. Other cities have seen larger increases in prices in the same period, but in Cork, prices were 9.4% higher than a year previously. In Limerick city, prices increased by 11.1%. The biggest increases in urban housing prices were in Galway (13%) and Waterford cities (13.5%).
Report author Ronan Lyons, economist at Trinity College Dublin, said: “Ireland’s housing market has been characterized for a number of years by strong demand, boosted recently by unexpected savings, but supply that has been steadily weakening. There are some signs that both sides of the market may be turning. On the supply side, the number of homes listed over the last 12 months has increased by 30% since early 2021, although it still remains 15% below the peak in 2019, while construction of new homes is set to reach a post-Celtic Tiger high this year.
“On the demand side, the rise in interest rates, prompted by inflation, will feed through to housing demand in due course. At the same time, sentiment among those active in the housing market has eased back, with expected inflation in housing prices over the next year below 1%, compared to over 5% three months ago. Expected inflation is one of the key drivers of immediate housing demand, so if prospective buyers feel they have more time to choose, they may take that opportunity.”