House prices have risen by 5% in 2017

The latest survey from MyHome.ie has found that the annual rate of inflation has surged to 9% nationally

House prices have risen by 5% in 2017

Photocall file photo

House prices around the country have increased by over 5% in the first three months of the year.

The latest house price survey by MyHome.ie has found that the annual rate of inflation has surged to 9% nationally – and over 10% in Dublin.

The report suggests that we could be facing double digit inflation by the end of the year.

A home will now set you back an average of nearly €240,000 - an increase of €12,000 on the last quarter.

Dublin houses are still the most expensive at €347,000; while the average home will set you back €235,000 in Cork City and €225,000 in Galway City.

The price of the most popular house type - the 3 bed semi-detached - rose in 20 counties was unchanged in 4 and was down in just 2.

Connacht saw some of the biggest gains with 3 bed semis in Galway rising by 18%, while they were up 17% in Sligo and 16% in Roscommon.

 

Angel Keegan, managing director of MyHome.ie said the report shows that people selling their homes are expecting higher prices - and are getting them.

She told Newstalk that there are a number of reasons why inflation is currently so high:

“Certainly there is pent-up demand but I think the additional elements that we are seeing come to the fore and most certainly the impact of the loosening of the central bank lending rules together with the introduction of the help-to-buy scheme and they are certainly impacting,” she said.

“There is a larger quantity of people chasing a smaller amount of stock and as a result we are seeing higher price growth than we had anticipated.”

She said she does not foresee a return to Celtic Tiger prices pointing to a number of factors indicating that the situation may be slowly changing:

“We are seeing a lot more new builds coming on the scene this year and we think more new build stock will become available as the year goes on and into 2018,” she said.

She said the figures suggest that we will see double-digit growth in inflation when the yearly reports are in at the end of 2017.

“However, at the beginning of the year we did predict that we may see double-digit growth in the capital and indeed in other cities around the country and my concern would be that that is exactly what our quarterly report is indicating.”

Conall MacCoille, Chief Economist at Davy and author of the report, said more needs to be done to bring new builds into the marketplace.

“While homebuilding activity is clearly stepping up, it is clearly not happening fast enough,” he said.

“The 14,900 homes completed in 2016 was still the lowest number since 1970, excluding the recent past.”