Revealed: House prices rose by €50 every day in the last year
Uphill battle for first-time buyers trying to get on the property ladder as prices soar nationally
House prices are increasing at an average rate of €50 each day against a backdrop of too few homes coming to the market, according to a new report.
The staggering rate of house and apartment inflation means that the vast majority of potential buyers face an uphill battle to meet existing mortgage lending rules.
And it means that existing homeowners can expect a big rise in property tax - if the government goes ahead with the planned review in 2019.
The latest House Price Report released today by Daft.ie shows prices have increased by almost 47pc from their lowest point in 2013. The average list price now stands at more than €240,000 - 8.9pc up on a year ago.
Increases in the third quarter of this year were more modest than in the rest of 2017. This is in line with market trends, as rises tend to ease off later in the year. Prices rose by 4.3pc in the first half of 2017, compared to a more modest 0.3pc between June and September.
Prices in Dublin are soaring far higher than the national average. Annual price inflation in the capital in the year to September was 9.9pc, compared to 8.2pc for the rest of the country.
Among other cities, growth in Galway was 9.2pc, Limerick and Waterford saw 8.5pc growth and in Cork the change in prices over the past 12 months was 5.1pc.
Trinity College Dublin economist Ronan Lyons said the Government's help-to-buy scheme was having an impact on prices. Adopting policies aimed at increasing supply, instead of manipulating market prices, would be more prudent, he suggested.
"There are simply too few newly-built homes for the tail to wag the dog," he said. "In the final nine months of 2016, before the scheme went live, roughly 15pc of transactions related to newly built homes.
"In the first nine months of 2017, the fraction was higher - but only just, at 17pc.
"These fractions also represent an upper bound for help-to-buy.
"Even now, some of the properties designated as newly built were actually built many years ago, while others will not be eligible because they are too expensive.
"Most of the many policy initiatives have been about manipulating demand and prices. If the housing system in Ireland is to become healthy, the next three years must see a change of policy focus to supply and quantity."
Pent-up demand is influencing much of the price growth, as the number of properties available to buy nationwide continues to fall. At 24,000 units, there were 4pc fewer properties on the market on September 1 compared to that date last year.
Daft.ie said the number of properties coming to market is falling at its slowest rate for five years, but this is brought about by extra supply rather than a declining demand. There were 40,000 properties listed in the fist eight months of this year - 2,400 more than the same period last year.
"As long as it remains unviable to build homes, especially apartments of varying kinds, in the vast majority of the country, the shortages will persist, both in market housing and in social housing," said Mr Lyons.
The price trends suggest most families could move to the next property tax bracket if the Government decides to press ahead with a recalculation of the rates in 2019.