House prices in western counties increased at twice the rate of the east coast last year as buyers battle over the lowest supply on record, according to a housing index.
The absence of new home building, and historically low supply, has seen prices for three-bed semi-detached homes in counties Clare, Donegal, Galway, Limerick, Mayo, Roscommon and Sligo increase by over €10,000 in the past 12 weeks – with an average annual rise of 16 per cent.
This is twice the rate of increase in commuter counties, which rose by 7.5 per cent, according to the Q4 REA Average House Price Index.
The index concentrates on the sale price of Ireland’s typical stock home, the three-bed semi, to give a representative snapshot of the second-hand property market.
The actual selling price of a three-bed, semi-detached house across the country rose by 2.1 per cent in the past three months to €330,602, and 9 per cent overall annually.
But west of the Shannon, counties such as Mayo (25 per cent) and Clare (21 per cent) have witnessed unheralded annual price inflation due to multiple buyers bidding on scarce properties.
REA agents nationwide are predicting a 6 per cent rise in house prices in 2025 but spokesperson Seamus Carthy has predicted an increase in bidding wars as buyers chase an extremely limited stock of second-hand three-bed semis.
“There are simply very few options for people, especially in areas where new homes are not being built – it’s as if someone drew a line down the centre of the country,” said Mr Carthy.
“We have seen buyers bidding on 10 different properties, and after being frustrated on them all, have decided to hold off until the new year.
“Many will come back rejuvenated but, finding limited supply in the market, they will want to close off immediately.
“This will trigger the sort of bidding wars that we have been seeing recently, where prices of €50,000 over asking price are not uncommon, due to lack of supply.”
Actual selling prices in Dublin city rose by 1.8 per cent in the last three months, and the average three-bed semi in the capital is now selling at €542,000.
Prices in the major cities outside the capital rose by an average of 2 per cent to €348,000 in the last three months – an annual rate of increase of 7.7 per cent, with agents predicting a further 9 per cent rise in 2025.
Galway city three-bed semis increased by €10,000 for the second quarter in a row to an average of €370,000, reflecting an annual rise of 10 per cent.
The cities of Cork (€390,000), Limerick (€320,000) and Waterford (€312,000) saw quarterly rises of 1.3 per cent, 1.6 per cent and 2.3 per cent respectively.
Homes in the country’s large towns continue to show the biggest growth nationwide, up 11.5 per cent on last September and 2.6 per cent this quarter to an average of €249,448.
The largest yearly rise was in Mayo where three-bed semis surged by 25 per cent to €240,000, an increase of €48,000 since the Q1 survey in March.
The biggest quarterly increase came in Clare where three-bed semis surged by €20,000 to €290,000, an annual rise of 21 per cent.
Agents REA Paddy Browne have pointed to a severe lack of supply of second-hand properties and new homes, which will continue to influence the market into 2025.
Homes in commuter counties rose by 2 per cent over the past three months to an average of €343,778, an annual rise of 7.5 per cent.
