House prices are surging upwards at their fastest rate in over a decade, Daft.ie’s latest report has found. 

The quarterly bulletin revealed that the average house price is now €357,851 - 12.3% higher than 12 months ago and 40% higher than when the pandemic began in 2020. 

Of all the Republic’s cities, Waterford recorded the largest increase at 15.2%, while Dublin it was 12.3%, in Galway it was 12.5% and in Limerick it was 12.8%. 

Cork recorded a single-figure rise of 8.6%. 

On Newstalk Breakfast, Daft.ie economist Dr Ronan Lyons described it as “yet another report” recording house price inflation. 

“What’s different about this is the speed,” he explained. 

“We have talked a report or two ago about signs of renewed pressure - as in, inflation going up, prices going up at a faster rate and that has worked out that way. 

“The rate of inflation we’re seeing now is the biggest rate of inflation since the Central Bank introduced their mortgage rules just over a decade ago. 

“12.3% higher than a year ago, on average across the country.” 

New houses for sale in Ballyholme. Picture by: Alamy.com.

Last year, 30,330 new homes were built in Ireland - fewer than the 32,525 completed in 2023. 

It all adds up to far fewer homes on the market than there is demand for. 

“The foundation of the problem is, as we all know, a lack of new builds,” Professor Lyons said. 

“What’s tipped the market over the edge is the second hand market. 

“As interest rates went up, there’s been a lack of supply of second hand homes and that’s made the problem even worse. 

“We can see now that spike in inflation.” 

A man walking past 'For Sale' signs in Dublin. Picture by: Leah Farrell / RollingNews.ie.

Professor Lyons added that there has not been enough building for “almost 20 years” and that means the market is “disproportionately” reliant on the secondhand market. 

“In other words, the majority of people around the country - with notable exceptions in the counties just around Dublin - [live in] sales markets which are completely dominated by secondhand homes,” he said. 

“As interest rates went up, over the last number of years, people fixed their interest rates. 

“That locks them into five to seven years and that has had an impact on the availability of second hand homes. 

“Three months ago, in the last report, we saw the smallest number of second hand homes available on the market at any point over the 20 years of the report - fewer than 10,000.” 

In the Programme for Government, Fianna Fáil and Fine Gael promised to “place special emphasis on supporting home ownership”, adding that increasing supply would be “key to addressing the housing crisis”. 

Main image: For sale and for rent signs. Picture by: eye35.pix / Alamy Stock Photo