HOUSE prices are 11.3% higher in the south west than they were in June 2020, as a result of strong price inflation in the market during the first six months of 2021.
The demand for holiday homes has also increased noticeably since the start of the year driving up prices.
That’s according to the latest residential market review from leading property advisors DNG, which has revealed house price inflation is now running at its highest level since 2017.
The DNG national price gauge, which tracks residential property price movements at a national level, excluding Dublin, shows that the average price of a home now stands at €233,582 up from €210,258 in June 2020.
In the south west region the average price of a resale property now stands at €266,844, up from €239,671 in June 2020. The report also notes that at a regional level, the annual rate of price inflation in the year to June 2021 was strongest in the mid west (15.8%), midlands (11.4%), south west (11.3%) but below the overall national average in the west (9.5%) and south east (9.6%) border (10.2%) and mid-east (10.6%) regions.
The report highlights the fact that in the year to December 2020 the annual rate of house price inflation was running at 1.4% nationally. However strong demand, coupled with a scarcity of homes for sale in the market, has served to drive up residential property prices across the country in the first half of 2021.
In the first six months of the year, an uptick in the rate of increase in house prices has been driven by the shortage of supply in the context of rising disposable income, elevated savings levels and demographic pressures.
At a national level, an analysis of the stock of homes currently for sale indicates that there are approximately 35% fewer homes listed for sale now, compared to the same time last year, and 45% fewer than at the same point in 2019.
In Dublin, inflation stand at 9.1% and the average price of a resale property now stands at €482,617, its highest level since the first quarter of 2009.
DNG forecasts that the current rate of price growth evident in the residential market will be a temporary phenomenon and will start to ease back later in the year as pent-up demand is satisfied.
In addition, there is solid evidence that the number of homes coming to the market is also increasing, albeit gradually, with DNG noting that instruction levels were 12% higher in Q2 compared to Q1 2021, and 152% ahead of Q2 2020.
DNG ceo Keith Lowe said: ‘Covid-19 has been a game changer for the housing market as it has been in most developed countries.
‘Buyers have more savings and are more focussed on making life changing decisions than they were before the pandemic.
‘In addition, an increasing number of ex-pats are also returning home and purchasing high end properties as many can now work remotely.
‘We have noticed that an increasing proportion of buyers are now seeking to buy in their home localities rather than in Dublin, as the prevalence of remote working increases.In addition, demand for holiday homes has increased noticeably since the start of the year thus driving up prices in those regions.’