House price inflation has risen to a three-year high of 10.9 per cent as panic buying, low borrowing costs and increased working from home fuel greater activity in the market.
This is the strongest level of growth seen since June 2018 and comes amid a strong pick-up in inflation generally.
The Central Statistics Office (CSO) said half of the growth has come in the last three months.
The figures show prices in Dublin rose by 10.2 per cent year on year in August, while prices outside the capital were 11.5 per cent higher.
In money terms, the average price paid for a home across the State is approximately €20,271 higher than it was 12 months ago while average prices in Dublin are €43,682 higher.
The CSO said the number of property transactions fell by 1.5 per cent in August to 3,764, with the total value of transactions put at €1.3 billion.
Buyers paid an average of €313,619 for a home in the 12 months to August. The mean price in Dublin (€484,147) was the highest in any region or county. Dún Laoghaire-Rathdown had the highest average price in the Dublin region at €655,124, while south Dublin had the lowest at €397,037.
Outside Dublin, the mid-east was the most expensive region, with a mean price of €330,813. Wicklow was the most expensive county, with a mean price of €417,768.
The Border region was the least expensive region in the year to August, with a mean price of €159,913.
Many had predicted property values would decline as a result of the pandemic but a number of factors – increased savings, home working and expatriates returning from London after Brexit – have led to an acceleration prices.
Despite the recent rapid rise in prices, the CSO’s national index is still 8.9 per cent lower than its pre-crash peak in 2007. Dublin residential property prices are 14.9 per cent lower than their February 2007 peak, while residential property prices in the rest of the Republic are 11.2 per cent lower than their May 2007 peak.
Commenting on the figures, umbrella group Brokers Ireland said “it is worrying that prices are accelerating into double digit growth and that long-standing supply and affordability issues remain”.
“This is minimal in terms of the need to deliver the estimated 35,000 or so homes needed every year. The Central Bank estimates housing completions will reach 27,000 next year and 31,000 in 2023,” the group’s Rachel McGovern said.
“Supply figures are increasing though and it is to be hoped that the marked improvement being seen in the supply of homes will help stem the current level of growth in prices,” she said.
Joey Sheahan from consumer website mymortgages.ie said: “The price increases we are witnessing in the CSO’s monthly report are definitely a source of concern for many prospective homeowners throughout the country.
“Some people see prices gradual tick upwards and think that time is of the essence – they must get on the property ladder asap before the homes they want become completely unaffordable.
“While others are worried that by buying now, they will be paying over the odds and are wondering if they should hold off in the hope that prices will decrease in the short to medium term.”