Second-hand home prices rose by 4.6% in first six months – Sherry FitzGerald

Second-hand home prices rose 4.6 per cent in the first six months of this year, according to Sherry FitzGerald data.

The news follows other reports this week signalling sharp increases in the cost of buying a home, including figures from Myhome.ie showing average house prices rose 13 per cent over the last 12 months to €303,000.

Sherry FitzGerald said on Wednesday that second-hand house prices rose 3 per cent in the second quarter of the year and by 4.6 per cent in the opening six months of 2021.

Inflation was strongest outside Dublin, with prices increasing 4.2 per cent in the last three months and 6.6 per cent overall in the first half of the year.

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Within the capital prices grew 2.1 per cent in the second quarter while they have risen 3.1 per cent since January 1st.

National Covid-19 lockdowns have aggravated already falling supplies, according to Marian Finnegan, managing director, Sherry FitzGerald.

“That said, other factors such as increased savings have also played a role,” she said.

Ms Finnegan added that building has picked up while an increased number of homes have been put up for sale recently.

“However, the market remains substantially out of kilter and further increases in supply will be needed before the rate of inflation begins to moderate,” she warned.

Just 16,000 new homes will be built in the Republic this year, according to some predictions.

Estimates of the number of new dwellings needed to tackle the housing crisis run to more than 30,000.

Lockdowns

Sherry FitzGerald said that almost 12,000 homes were sold in the Republic in the first quarter of this year, 7 per cent more than the same period in 2020, which was unaffected by Covid lockdowns.

In Cork the number of homes traded rose 7 per cent, while the figure remained steady in Limerick and fell 5 per cent in Galway.

Almost 3,500 houses sold in Dublin during the first three months of 2021, 2 per cent more than during the opening quarter of last year.

Owner occupiers accounted for around three out of four homes sold by Sherry FitzGerald during the first half of the year, the estate agent noted.

Ms Finnegan pointed out that demand for houses is growing “strikingly” across the globe as the Covid-19 crisis recedes.

While she added that house price inflation was not unique to the Republic, she pointed out that the shortage here was particularly acute.

Mortgages

An increase in the number of mortgages that Irish banks have approved so far this year indicates that demand remains high, according to Ms Finnegan.

“As such, an elevated period of price inflation is likely to persist until we see a notable uplift in both the supply of new builds entering the market and a positive trend line on the replenishment of second-hand stock for sale,” she said.

The figures from Irish Times-owned Myhome.ie showed the national average price for a house breaking the €300,000 mark for the first time. The cost of a home in Dublin was €412,000, the company said.

Rival Daft.ie said that the average price for houses sold on its website rose €34,000 year-on-year to €284,000 in the second quarter of the year.