A secondhand home in Dublin today costs almost €45,000 more than it did a year ago on average, according to estate agent DNG. And it says house prices are set to continue rising along similar lines in the coming year.
The DNG national price gauge – which excludes Dublin – recorded an increase in the average price of a secondhand home of 13.6 per cent last year. That represented a marked acceleration in the rate of inflation compared to 2020 when prices rose by 1.4 per cent.
Including Dublin, which DNG measures separately but on the same format, the overall national rate of price increase last year stood at 12 per cent.
The national gauge, which tracks prices on a half yearly basis, recorded growth of 5.3 per cent in the six months to December, compared to an increase of 7.9 per cent in the first six months of last year.
The reports are based on assessments by DNG valuers of a representative sample of secondhand properties in each area.
All regions of the State recorded double digit price growth in 2021, except for Dublin (+9.9 per cent).
Prices rose fastest in the midwest region (+17.2 per cent) followed by the midlands (+14.2 per cent) and the west (+13.8 per cent) while the southeast saw increases of 11 per cent.
Outside the capital, the highest average price was found in the mideast (€349,259) followed by the south west (€279,844).
In Dublin, a separate quarterly house price assessment by DNG finds that the average price of a resale property now stands at €499,516, compared to €454,669 at the end of 2020. However, residential property prices in the capital remain 30 per cent below their 2006 Celtic Tiger peak, the agency said.
At a national level, and excluding Dublin, the average price of a secondhand home now stands at €246,018.
Apartments
The report also looks at the Dublin apartment market and finds that, following several years of relative price stability, 2021 saw a return to solid growth.
The average price of an apartment in the capital rose by 7.4 per cent in 2021, compared to a small decrease in values of 1.3 per cent in 2020 and 0.4 per cent in 2019.
Looking at the outlook for the year ahead, the agency forecasts further growth in prices both in Dublin and nationally, with regional price gains again set to outstrip those in the capital where DNG says nominal values are already elevated, and affordability is more challenged.
The agency is forecasting an average uplift in regional markets of 12-13 per cent this year. Price growth in Dublin will more likely be high single digits, in the order of 6-8 per cent, it says.
DNG say the factors underpinning its forecasts include continued strong economic and wage growth, the heightened household savings levels seen in 2020-21, and the extension of Government initiatives for first-time buyers announced in the budget.
It also cited strong demand from this cohort evident in mortgage approvals data and the prevailing low interest rate environment.
While the supply of new residential homes is set to increase to around 26,000 units this year, DNG says this will still be well below the estimated 30,000-35,000 new units required each year to meet demand.
DNG chief executive Keith Lowe said the high level of price growth last year was in line with property markets in most developed countries.
Alongside supply issues in the secondhand market due to Covid-19 restrictions, he said the pandemic had created “a large level of pent-up demand in the market as buyers spent less and saved more towards their deposits.
“The upper end of the market also performed strongly in 2021 which was strengthened by many buyers returning from overseas to live, be it Covid or Brexit related.”
