Property market records surge due to asking price inflation

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

According to the latest house price report from MyHome.ie, 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, published in association with Davy, also found that asking price inflation year-on-year increased by 5.1% nationwide.

The mix-adjusted asking price for newly-listed properties nationally now stands at 282,000 euro, while the price in Dublin is 386,000 euro and elsewhere around the country it is 236,000 euro.

The author of the report, Conall MacCoille, 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 2020 could at face value be taken as a sign of a fresh bubble emerging in the Irish housing market,” he said.

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“However, we would caution that Covid-19 has disrupted the usual seasonal pattern of the housing market and may have flattered the annual comparison.

“Just as we thought the -3% inflation reading in Q2 2020 was an aberration, the same is likely true for the +5% recorded here. The truth probably lies close to the middle of these two readings.

“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.”

Angela Keegan, managing director of MyHome.ie, said that 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.”

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