High-earning first-time buyers are helping to turn up the heat in the property market, MyHome.ie has said, as asking prices continue to surge, while the number of properties listed for sale hit a new low in recent months.
In its latest property price report the property website said the median asking price for a home was up 6.5 per cent nationally in the 12 months to the end of March, the strongest rise in prices since the third quarter of 2022. Notably it means the annual rate of property price growth has accelerated by more than two percentage points in the first three months of this year, the report’s authors said.
Competition in the market is so fierce that homebuyers are paying 4 per cent above the original asking price at the median, said Conall Mac Coille, chief economist at Bank of Ireland. MyHome.ie publishes the report in association with the bank.
After a period of “relatively sluggish growth” in Dublin, annual asking prices jumped 7.5 per cent in the first quarter from 4 per cent at the end of 2023, while asking prices were up 5.5 per cent higher in the rest of the State than at this time last year, up from 3.9 per cent.
Nationally the median price of a house in the first quarter hit €301,000, with this figure rising to €425,000 in Dublin and €285,000 outside Dublin.
“The tight housing market is evident in several metrics from the MyHome report,” Mr Mac Coille said. “The number of properties listed for sale on MyHome hit a fresh record low of 10,935 properties. This is below even the Covid-19 trough of 11,200, and down 19.5 per cent on the year.”
On the buyer’s side of the equation already buoyant levels of demand are being supported by the overall strength of the economy and the jobs market. First-time buyers are coming to market with “greater purchasing power”, he said, despite the rise in interest rates and living costs over the past 18 months.
Data from 2023 showed the average first-time buyer had an income of €88,258, up 6.7 per cent over 12 months. “Hence, the average mortgage approval for house purchase rose above €300,000 for the first time at the end of 2023, up 6.4 per cent on the year,” Mr Mac Coille said. “This points to further house price inflation in 2024.”
Joanne Geary, managing director of My Home.ie, said the last report in January showed the number of high earners was rising at “a significant pace” in the Republic. “We are seeing the effects of that now. The average first-time buyer is earning more money and, as a result average mortgage approval values are rising.”
On a more positive note, she said the rate of housing starts continued to be encouraging.
Mr Mac Coille said: “In summary there has been no let-up in demand and, with the supply situation still difficult, it is not too surprising that house price inflation has regained momentum. We expect to see a mid-single digit rise in Irish house prices in 2024, close to 4 per cent.”
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