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 euro in the past 12 weeks – with an average annual rise of 16%.
This is twice the rate of increase in commuter counties, which rose by 7.5%, 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% in the past three months to 330,602 euro, and 9% overall annually.
But west of the Shannon, counties such as Mayo (25%) and Clare (21%) have witnessed unheralded annual price inflation due to multiple buyers bidding on scarce properties.
REA agents nationwide are predicting a 6% 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 euro over asking price are not uncommon, due to lack of supply.”
Actual selling prices in Dublin city rose by 1.8% in the last three months, and the average three-bed semi in the capital is now selling at 542,000 euro.
Prices in the major cities outside the capital rose by an average of 2% to 348,000 euro in the last three months – an annual rate of increase of 7.7%, with agents predicting a further 9% rise in 2025.
Galway city three-bed semis increased by 10,000 euro for the second quarter in a row to an average of 370,000 euro, reflecting an annual rise of 10%.
The cities of Cork (390,000 euro), Limerick (320,000 euro) and Waterford (312,000 euro) saw quarterly rises of 1.3%, 1.6% and 2.3% respectively.
Homes in the country’s large towns continue to show the biggest growth nationwide, up 11.5% on last September and 2.6% this quarter to an average of 249,448 euro.
The largest yearly rise was in Mayo where three-bed semis surged by 25% to 240,000 euro, an increase of 48,000 euro since the Q1 survey in March.
The biggest quarterly increase came in Clare where three-bed semis surged by 20,000 euro to 290,000 euro, an annual rise of 21%.
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% over the past three months to an average of 343,778 euro, an annual rise of 7.5%.