Asking prices for homes rise to their highest level in almost two years
The latest property report from MyHome.ie found that the median asking price nationally in the second quarter of 2024 was €365,000
Asking prices for homes across Ireland have risen to their highest level in almost two years, new data shows.
According to MyHome.ie's latest property report, national asking prices rose by 7.3 year on year in the second quarter. The last time this annual figure was higher was in summer 2022, when inflation was 7.8 per cent nationwide.
This notable figure is replicated both in Dublin and elsewhere around the country, with annual inflation running at 7.2 per cent in the capital and 7.6 per cent in the rest of Ireland.
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Meanwhile, the report found asking prices rose by 5.1 per cent on the quarter nationally - by 3.3 per cent in Dublin and by 6.7 per cent outside the capital.
This means the median asking price for homes across the country in Q2 was €365,000 - in Dublin it was €465,000 and elsewhere around the country it was €310,000.
The rise in asking process is being attributed to the sustained strength of the Irish labour market, along the continual poor supply of properties,
According to Joanne Geary, Managing Director at MyHome.ie, the loosening of mortgage lending rules has seen first-time buyers in particular take on more debt, which has also contributed to rising prices.
According to the report, the share of first-time-buyers with a loan-to-income (LTI) ratio on their mortgage loan between 3.5-4x, grew from just 6 per cent in 2022 to 36 per cent in 2023. Prior to the relaxation of the rules 59 per cent of first-time-buyers had an LTI ratio just below the then 3.5x regulatory threshold.
A 4.7 per cent rise in average earnings to €50,300 in the year to Q1 2024 is said to have had an impact on housing asking prices, with a 4.6 per cent rise in average mortgage approval values to €313,000 recorded in the year to April.
The report also found that in May, houses were being sold for 6 per cent over the original asking price, at the median. This is a stark change to 2023, when the median premium was just 1 per cent.
Meanwhile the average time to sale agreed nationwide was just over 11 weeks in Q2 2024, which is close to a record low.
Commenting on the findings, author of the report, Conall MacCoille, Chief Economist at Bank of Ireland, said: “The clear message from the Q2 2024 MyHome.ie Property Price Report is that house prices have gained further momentum. Asking prices rose by 5 per cent in Q2 2024, up 7.3 per cent on the year, the highest figure since Q3 2022.
“This represents an acceleration in the pace of annual asking price inflation from 6.5 per cent in Q1 2024. Furthermore, the pick-up in the pace of asking price inflation has been broad based across Dublin (7.2 per cent) and the rest of Ireland (7.6 per cent).”
Mr MacCoille said that the sustained strength of the Irish labour market was having a significant effect on the housing market. “The 4.7 per cent rise in average earnings to €50,300 in the year to Q1 2024 was always likely to push up house prices," he said. "Indeed, the average mortgage approval in April was €313,000, also up 4.6 per cent on the year.”
Mr MacCoille added that the relaxation of the Central Bank mortgage lending rules for first-time buyers had seen the share of first-time buyers with a loan-to-income ratio on their mortgage between 3.5x-4x leap from 6 per cent in 2022 to 36 per cent last year.
“The fierce competition between homebuyers has continued into the second quarter, with residential transactions in May being settled by 6 per cent on average above the original asking price,” he said.
Another factor impacting prices is the continual poor levels of property supply in the market. “There were just 12,500 properties listed for sale at end-June, still close to the historic low in Q1 2024 and down 11 per cent on 2023. To some extent this appears to reflect a hangover from 2023, when reports of falling house prices, stretched affordability and ECB rates led many would-be vendors to incorrectly fear demand was soft. This trend may reverse but will take time,” Mr MacCoille said.
“The second quarter of the calendar year is particularly important for asking prices, set ahead of the busy summer trading season, before the market cools heading into the winter. The momentum in the market means a high single digit gain in the order of 5-6 per cent for the year in full now looks likely.”
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