Peak in house-price inf lation

NATIONAL house-price inflation is now at its highest level in more than three years, a new report shows.

According to a new MyHome.ie report, asking-price inflation rose by 5.2% nationally in the third quarter of this year, the highest figure since the first quarter of 2017, when it stood at 5.5%.

The report, in association with Davy, also found that asking-price inflation year-on-year rose by 5.1% nationwide.

The mix-adjusted asking price for newly listed properties nationally now stands at €282,000 on average, while the price in Dublin is €386,000.

Report author Conall Mac Coille, chief economist at Davy, said that despite the significant increase, ‘we were not likely to be facing another property bubble’.

‘The news that asking-price inflation bounced back to 5% in Q3 [third quarter] 2020 could at face value be taken as a sign of a fresh bubble emerging in the Irish housing market,’ he said. ‘However, we would caution that Covid-19 has disrupted the usual seasonal pattern of the housing market and may have flattered the annual comparison.’

Mr Mac Coille added: ‘The third quarter is normally a weak one for pricing, capturing the end of the summer selling season – which has been delayed this year. Hence, asking-price inflation will likely fall back in Q4.’

MyHome.ie managing director Angela Keegan said strong demand and weak supply caused by the suspension of construction at the height of the lockdown were driving the inflation rate.

‘MyHome.ie recorded its busiest ever month for website traffic in July, while our latest consumer sentiment survey conducted in August showed that 71% of prospective buyers expected to buy in the next year,’ she said.

‘This shows that buyers appear to have largely been unaffected by Covid-19’s economic impact. On the supply side, meanwhile, stock levels are down 25% compared with this time last year. This combination has led to asking prices being driven upwards.’