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Irish house prices rise by €20,000 during pandemic as 'supply collapses'

The price of Irish homes has increased by €20,000 over the last year, according to new Daft.ie ...
Stephen McNeice
Stephen McNeice

12.08 31 Mar 2021


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Irish house prices rise by €20...

Irish house prices rise by €20,000 during pandemic as 'supply collapses'

Stephen McNeice
Stephen McNeice

12.08 31 Mar 2021


Share this article


The price of Irish homes has increased by €20,000 over the last year, according to new Daft.ie report.

A 'collapse' in the supply of available housing is the key factor being blamed for the significant jump in prices.

House prices rose by an average of 8% nationally in the first quarter of this year.

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The largest increases were in parts of Leinster, with Kilkenny, Laois, Offaly and Longford - where increases of more than 15% were recorded.

The regional cities saw prices rise by 11-12%, while in Dublin they went up 7%.

The average sale price nationally now stands at €276,000.

There were 40% fewer homes available to buy at the start of March compared to the same time last year.

Ronan Lyons, economist at Trinity College Dublin and author of the report, spoke to Newstalk Breakfast about what's happening in the housing market.

Irish house prices rise by €20,000 during pandemic as 'supply collapses'

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He observed: "If you talked to someone like me a year ago I'd have said 'something like a pandemic is probably going to cause prices to fall because people have lost their jobs'.

"In fact, the nature of the recession and the way it's affecting people [means] a lot of demand is still there.

"A lot of people have their jobs, but they can't really spend the income - saving up for a home is one of the few things they can still do."

Mr Lyons said the demand is still there, but the supply has collapsed.

The construction of homes has stalled due to restrictions, while the number of second-hand homes being put on sale has also dropped.

John Fitzgerald, adjunct professor in the Department of Economics in TCD, also pointed to a big increase in savings during the pandemic.

He said: "There's a paper published by the Central Bank today, which suggests consumption could rise by 5% as a result of the spending of these savings when we're allowed to spend them.

"Even if a fraction of it goes into the housing market, you're likely to see further upward pressure on prices.

"The crisis has meant instead of 20,000 houses we've only built 10,000 houses when we need to build 30,000."

Figures have also shown the average rent in Ireland is now more than €100 more expensive than the average mortgage payment.

Main image: File photos of houses being built. Photo: RollingNews.ie

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