House prices are expected to hit their highest ever levels within a matter of weeks and are already just 2 per cent off the previous Celtic Tiger high in 2007.
In fact, according to KBC chief economist Austin Hughes, people are probably already paying record prices that just have not been recorded yet.
As the Irish Examiner reports, the Central Statistics Office’s latest Residential Property Price Index put house price inflation at 15.3 per cent in the year to February, with house prices outside of Dublin up 16.8 per cent and the average home in Ireland now costing €330,294. February was the 18th month in a row that prices had risen.
“On current trends, a new all-time peak in Irish property prices is likely to be seen in the second quarter of this year,” said Austin Hughes.
"Indeed, given the lags between sales being agreed and purchases recorded, the likelihood is that transactions are now taking place at record prices.”
As ever, experts pointed to a lack of supply in the market as a key driver as house prices continue to rise.
Lorcan Sirr, housing policy analyst and senior lecturer at Technological University Dublin, said that over the last five years fewer than 7,000 of the new homes built each year have been available to buy by owner-occupiers, with the rest built going to built-to-rent or social housing.
“This is despite the fact that output has gone up by 50 per cent,” he said. "It means that for first-time buyers out there and everybody else, there’s an incredibly limited supply coming onto the market.”
He said many people saved money during the pandemic with a view to buying their own home, and this has added to the demand.
“The demand and the financial clout that people have is going up, but yet the number of houses that are coming on in the market is going down, percentage-wise,” he said.
"In 2017, nearly half of all the houses that we built came to the market, and that means they came to your estate-agent window. Last year, it was 28 per cent."