The report, which is published in association with Davy, found that annual asking price inflation rose by 6.3% nationwide, by 4.8% in Dublin and by 7.2% elsewhere around the country.
This is due to a number of factors:
- Prospective home-buyers have largely been insulated from job losses;
- Government supports have protected incomes, removing the risk of forced selling;
- Mortgage lending hit a new cycle high of €1.1bn in October;
- Housing supply issues have become more acute
This data confounds warnings sounded earlier in 2020 that the housing market could see ‘double-digit’ price declines.
Meanwhile, after significant increases in Q3, quarterly asking price inflation has tapered off – rising by 0.6% nationally, by 1.6% in Dublin, and by 0.6% elsewhere around the country.
This means the mix-adjusted asking price for new sales nationally is €284,000, while the price in Dublin is €392,000 and elsewhere around the country it is €238,000. Newly listed properties are seen as the most reliable indicator of future price movements.
The author of the report, Conall MacCoille, Chief Economist at Davy, said that house price increases were now likely in 2021. “This quarter’s MyHome report points to an acceleration in annual asking price inflation to 6%, the fastest pace in almost three years. This pressure has not yet turned up in transaction prices, although the Central Statistics Office (CSO) Residential Property Price Index (RPPI) rose by 0.5% in October, the sharpest monthly increase in over one year. It is probably only a matter of time before the official measure of house price inflation accelerates.
“As we head into 2021, homebuyers have saved additional funds to purchase homes, with sentiment helped by the likely recovery in the economy as vaccines are disbursed. Given that homebuilding will remain impaired, with banks seeking lending opportunities, too much cash is chasing too few homes – which can only push prices higher.”
Angela Keegan, Managing Director of MyHome.ie, said: “The property market mirrors the overall economy, and we are in a much better place now than we may have expected to be earlier in the year when the virus emerged. Government Covid-19 supports, increased mortgage lending, and the concentration of job losses among mostly lower-paid workers have ensured the property market has remained buoyant, while the ongoing issue of supply has exacerbated demand leading to a rise in house price inflation.”
Full details of the report can be found at www.myhome.ie/reports
For further information, contact:
Julian Fleming (087-6915147)