‘Red hot’ rises: Return to Celtic Tiger era as house prices surge by up to €1,500 a week

Selling prices for three-bedroom semi-detached homes have risen more than 4pc over the past three months nationwide, with areas such as Drogheda and Limerick recording double-digit increases in the same period, according to new data released today by the Irish Independent REA Average House Price Index.

The survey also shows house prices in Dublin are surging by €1,500 a week.

Fuelled by pent-up demand and the recent return of on-site viewings, the marketplace is also experiencing the lowest supply and the shortest time taken to sell in recent history, with sales being concluded in four weeks, but in some locations within three.

This is less than half the 10-week average experienced this time last year and the fastest average selling time since the survey began.

Three-bed semis in commuter counties rose 4.33pc, or more than €11,000, in the past three months to an average of €270,111 – with the average home selling in just three weeks.

The country’s biggest quarterly rise came in Drogheda, where demand caused prices to increase by €30,000 to €250,000 in 12 weeks – a rise of 13.5pc in the quarter and 19pc annually.

At the same time, some estate agents are beginning to turn back to auctions, a process more widely deployed in the Celtic Tiger years as a more manageable way of selling properties when levels of interest are high.

The survey concentrates on true sale prices of Ireland’s typical stock home, the three-bedroom semi, giving an accurate picture of the second-hand property market in towns and cities.

The survey is immediate and based on true sales, unlike other price barometers based on asking prices, which are rarely reflective of market transactions.

The price of the average semi-detached home rose by an average €10,000 countrywide over the past three months to €253,685 – leading to an annual increase overall of 8pc.

The biggest rises in Q2 came in commuter counties and the country’s large towns as buyers continued to move out farther from the capital in preparation for long-term hybrid-working situations.

“While the market operated steadily through lockdown, the ability to view homes and the reopening of estate agents has seen a further flood of mortgage-approved buyers emerge,” said Real Estate Alliance spokesperson Barry McDonald.

“Many people were not comfortable with the idea of buying houses without the traditional viewing, and these have now joined the ranks of those chasing a limited supply. Buyers are motivated and have financial firepower, and our agents are seeing far more multiple bidder situations, pushing prices up.”

Mr McDonald said a shortage of new and second-hand properties for sale had been exacerbated by sellers who had been reluctant to put their homes on the market during lockdown.

“We are starting to see a moderate increase in supply of both second-hand and new homes, which may improve the situation,” he added.

In Dublin city, house prices rose by €1,500 per week in Q2, increasing from €438,500 in March to a present rate of €456,667.

This is a 4.1pc rise over 12 weeks when compared to an annual increase of just 1.4pc in the 12 months of 2020. During the years of Tiger inflation, prices maintained a steady rise of 1pc or more per month, with prices moving up by between 12pc and 22pc a year.

While Cork and Galway saw steady rises, the post-lockdown effect was more pronounced in Limerick and Waterford cities, where prices rose 9.3pc and 4.3pc respectively.

In Drogheda where 13.5pc marked the highest three month price rise in the country, time taken to sell has decreased to just three weeks, the lowest nationwide. Local agent Darina Collins, of REA O’Brien Collins, said the market has really taken off since the lifting of Covid restrictions.

“Pent-up demand means prices are rising across the board, and we are currently seeing properties making up to 16pc more than at the end of 2020,” said Ms Collins.

“The scarcity of supply plus availability of buyers with savings is having a big impact on second-hand market.”