Prospective homebuyers face further difficulties in the housing market with increasing prices and record low supply.
According to the latest MyHome.ie / Davy Q4 2021 Property Price Report, the annual asking price inflation rose by 9.7 per cent nationwide.
In the capital, prices increased by 7.4 per cent, while 10.6 per cent increases were experienced elsewhere across the State.
Meanwhile, quarterly asking price inflation also rose by 1.3 per cent nationally and by 1.7 per cent in Dublin. Other locations outside the capital had quarterly increases of 1.1 per cent.
The most recent rise in asking prices now means that the mix-adjusted asking price for new sales nationally is €311,000 while the price in Dublin stands at €421,000, and €263,000 elsewhere in the country.
'Grim'
Conall MacCoille, chief economist at Davy, said the findings of the report paint a grim picture for prospective homebuyers.
"The unwelcome message from this quarter's MyHome report is that there is little sign of conditions easing," Mr MacCoille said.
"Prices also rose by an uncharacteristically sharp 1.2 per cent in Q4 during the normally quiet winter months.
"This reflects the market grinding tighter, with the stock of homes listed for sale having fallen to a fresh historic low of just 11,300.
"In addition, Ireland’s labour market is performing exceptionally well, adding to housing demand.
"The shortage of stock for sale or rental is most acute outside the capital, Dublin, and is also evident in a marked decline in the average time to sale agreed to just three months nationally."
As prices continue to increase, more and more people are finding themselves locked out of the housing market.
"Our analysis shows that house prices are now seven times’ average incomes," Mr MacCoille said.
"Even still, Central Bank of Ireland and Economic and Social Research Institute (ESRI) estimates suggest that the mortgage lending rules have stopped house prices rising by an additional 10-25 per cent over and above existing levels.”
'Dysfunctional'
Commenting on the current situation in the Irish housing market, Angela Keegan, managing director of MyHome.ie, said supply is too low to accommodate the soaring demand.
"It is promising to see construction activity has increased for seven months in a row to November, but the stark reality is that we will unfortunately be living with a dysfunctional property market for some time to come," Ms Keegan said.
"We have never seen such a lack of stock on the MyHome.ie website and, given the significant increase in savings among prospective homebuyers, it is doubtful we will see much let-up in demand during 2022.
"We can only hope that restrictions are not reintroduced as the construction sector needs to be given every opportunity possible to continue to build properties."
