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Property prices jump by ​​​​​​12.4pc in space of a year, as panic grips the market

Higher incomes for those working in multinational tech and pharma companies fuelling price rises

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Elbow bump: Taoiseach Micheál Martin meets local residents during a visit to the Gort Fionnbarra housing development in Navan, Co Meath. Photo: Niall Carson/PA

Elbow bump: Taoiseach Micheál Martin meets local residents during a visit to the Gort Fionnbarra housing development in Navan, Co Meath. Photo: Niall Carson/PA

Elbow bump: Taoiseach Micheál Martin meets local residents during a visit to the Gort Fionnbarra housing development in Navan, Co Meath. Photo: Niall Carson/PA

Higher incomes for people working in multinational companies is one of the main factors pushing property prices higher.

Along with a chronic shortage of homes to buy, the surge in incomes is being cited for prices rising at their highest rate in more than three years.

Prices were up by 12.4pc across the country in the year to September, according to the Central Statistics Office (CSO). The pace of property price rises is picking up.

Economist Austin Hughes said panic buying was setting in. It was the largest increase since May 2018.

Prices rose by 1.6pc in the month of September. Over the last year, prices in Dublin were up by 11.5pc.

But outside of the capital and its suburbs, there were even sharper rises, with an increase annually of 13.2pc, as the housing crisis deepened and spread across the State.

The Border region has seen the largest gain, with prices surging upwards by 21pc.

Experts have questioned whether such strong price rises are sustainable.

Around than one-third more homes were bought in September when compared with a year earlier.

The CSO said 4,304 dwelling purchases by households at market prices were filed with Revenue, an increase of 34.8pc compared to September last year.

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The median, or typical, price of a residential property bought was €272,000.

The lowest median price for a house was €125,000 in Leitrim, while the highest median price was €570,000 in Dún Laoghaire-Rathdown.

Second-hand properties are driving the price rises, as they were up 13pc in September.

This is compared with a rise of 3.3pc in new home prices, according to the CSO.

Economist with Davy Stockbrokers, Conall Mac Coille, said higher incomes for those working in multinational technology and pharmaceutical companies was a factor behind soaring property prices.

“Price inflation has not been solely driven by weak supply,” said Mr Mac Coille.

“The 20pc growth of income taxes in 2021 demonstrates employment in the higher paid cohorts of the labour market has been very strong, in part driven by the multinational sectors.”

KBC Bank chief economist Austin Hughes said the pace of property price rises was picking up.  

Strong demand has been fuelled by an increased focus on housing because of the pandemic, with people spending more time at home than they would have previously.

Another factor pushing up demand is increased savings capacity for some.

He added that there was “some element of panic buying on fears of a persistent shortfall in supply and a corresponding lasting uplift in prices”.

Prices were rising at a rate of 6.8pc in early summer, but have entered double-digit ­territory since August.

Goodbody Stockbrokers economist Dermot O’Leary said prices have now increased at an annualised rate of 25pc in the July, August, September period.

This is the fastest rate of rise in seven years.

All regions contributed to the acceleration in house prices over recent months.

Overall, the national index is 7.4pc lower than its highest level in 2007, when a credit-fuelled boom and a house-buying mania sent prices soaring to unsustainable levels.

Dublin prices are 14pc lower than their February 2007 peak, while prices in the rest of ­Ireland are 9.5pc lower than their May 2007 peak.


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