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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 increased by 5.2% nationwide in the third quarter of this year, the highest figure since the first quarter of 2017, when it stood at in 5.5%.
The report, published in association with Davy, also found that year-over-year asking price inflation increased by 5.1% nationwide.
The combination-adjusted sales price for newly listed properties domestically is now € 282,000, while the price in Dublin is € 386,000 and the rest of the country is € 236,000.
The report’s author, Conall MacCoille, Davy’s chief economist, said that despite the significant increase, “we were not likely to face another housing bubble.”
“The news that initial price inflation recovered to 5% in the third quarter of 2020 could be taken at face value as a sign of a new emerging bubble in the Irish property market,” he said.
“However, we warn that Covid-19 has disrupted the usual seasonal pattern of the housing market and may have favored the annual comparison.
“Just as we thought the inflation reading of -3% in the second quarter of 2020 was an aberration, the same can be said of the + 5% recorded here. The truth is probably near the middle of these two readings.
“The third quarter is normally weak for prices, capturing the end of the summer sales season, which has been delayed this year. Therefore, the requested price inflation will probably recede in the fourth quarter. “
Angela Keegan, managing director of MyHome.ie, said strong demand and tight supply caused by the suspension of construction at the height of the lockdown were driving the rate of inflation.
“MyHome.ie posted its busiest month for website traffic in July, while our latest consumer confidence survey in August showed 71% of prospective buyers expected to buy in the next year,” he said.
“This shows that buyers appear to have been largely unaffected by the economic impact of Covid-19. On the supply side, meanwhile, inventory levels are down 25% compared to this time last year. This combination has led to higher sales prices. “
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