Property prices rise at their fastest pace in seven years

They were up by 14.8pc in the year nationally.

This represents the fastest pace of growth in almost seven years.

It also marks the 17th month that the annual rate of house price inflation has been stronger than the previous month.

Prices in Dublin rose by 13.3pc in the year to January, with prices outside Dublin up by 16pc, according to the Central Statistics Office.

The property price index shows that prices in the month of January were up 0.9pc, slightly down on the rate of increase in the previous three months.

Border counties saw the largest rise with hikes of 24.7pc in the year to January, reflecting strong demand for a limited housing stock as people choose to move out of urban areas and work from home.

Similar factors are thought to behind the rise of 18.8pc in property prices in the South East, with a rise of 18pc in the Midlands.

The national index is just 3.3pc lower than its highest level in 2007 during the Celtic Tiger boom.

Dublin residential property prices are 11pc lower than their February 2007 peak, while residential property prices in the Rest of Ireland are 4.7pc lower than their May 2007 peak.

Economist with KBC Bank Austin Hughes said that the figures show that the property transactions happening now in the spring home-buying season are occurring at new record prices.

“So, in a variety of ways, the January figures underline the degree of price pressures in the Irish housing market at present.”

He said he expects a very bumpy path to a slower and more sustainable pace of increase in Irish house prices.

“The market is currently dominated by buoyant home-buyer demand.

“In the near term, this is underpinned by a strong jobs market and the prospect of faster wage growth in 2022 as well as a rebuilding of household deposits over the turn of the year,” Mr Hughes said.

However, he said increased global uncertainty and the likelihood of rising the European Central Bank interest rates later this year, as well as the expectation of improved new housing supply, may introduce some caution into the market.

“For these reasons, we may be close to peak pressures at the moment but we may not be at peak prices.”

Mr Hughes said prices were rising at a faster rates outside Dublin due to the fact that properties are cheaper.

This reflects the influence of affordability constraints and increased working from home.

However, with the return to the office regaining momentum as health-relate restrictions fade, the relatively rapid pace of growth in property prices in more rural areas may ease back as 2022 progresses.

The median, or typical, price of a dwelling purchased in the year to January was €280,000, the CSO said.

The lowest median price for a house was €130,000 in Longford, while the highest median price was €595,000 in Dún Laoghaire-Rathdown.