The lack of housing supply in Cork and Munster is a key factor behind rising inflation in the region compared to areas like Dublin, it has been revealed.
The latest sales report from property website Daft.ie, published today, revealed that house prices across Cork rose by more than the national average in the past year, it has been revealed.
While the average house price across Ireland saw the lowest rate of inflation since late 2013 (3.7%), prices in Cork county rose by 9% and by 4.4% in the city.
The average house price in the county is now €235,000, 64% above its lowest point while house prices in the city stand at €286,000, 74% above its lowest point.
The Daft report noted that inflation is 3% or lower in Leinster and Connacht-Ulster, but remains above 10% in Munster.
It also marked that, for 13 months, housing availability is being driven by Dublin and Leinster.
“We’re seeing a big improvement in construction activity and housing supply in the Greater Dublin area but that hasn’t spread to other parts of the country to the same extent,” said Ronan Lyons, economist at Trinity College Dublin and author of the Daft.ie report.
“There has been a mild improvement in and around Cork but nothing on the scale of Dublin.
“For that reason, when you look at Cork and wider Munster, you’re still seeing pretty significant price increases, albeit from a lower base than the Dublin area,” he added.
“But that tells us that the demand is there but the supply is not yet.” Mr Lyons said that Cork should not wait until house prices match those in Dublin before addressing this issue.
“What Cork needs, and what the country needs, is to see construction costs brought back down in line with real incomes so that it’s viable to ensure that supply is there.
Mr Lyons also called for the focus to shift from the level of building to the mix.