House prices increased on average by 7.7 per cent in 2021 according to Daft.ie's latest property report.
The average price nationwide was €209,998 in the final quarter of the year, according to the Irish Examiner.
Supply shortages have also become more apparent over the last year, with the number of houses listed for sale in December falling by almost 4,000 to 11,483 compared to the same month of 2020.
The report's author, Trinity College Dublin economist Ronan Lyons described inflation on house prices as "stubbornly high", adding it "reflects a combination of unusually strong demand and ongoing weak supply".
"Demand for homes to buy, which had been strong anyway from the mid-2010s, has received an unexpected boost during the Covid-19 pandemic, with prospective buyers able to tap into ‘accidental’ savings, as expenditure fell during the lockdowns," Mr Lyons explained.
The report shows prices increased significantly in rural areas as Galway, Mayo, Leitrim and Wexford noted the largest hikes.
"In all markets outside the five main cities, price rises are on average 12.5 per cent year-on-year, while prices in cities are on average 4 per cent higher," the report states.
Figures also show South Co Dublin had the highest average house price at €626,801, followed by South Dublin City (€446,415), Wicklow (€383,508) and North Dublin City (€370,992).
On the other end of the scale, Leitrim was found to have the least expensive average price (€158,246), coming in below Longford (€168,327), Roscommon (€171,621) and Sligo (€172,192).
