Property prices are on the rise again, with 2023 seeing an annual jump of 4.1% nationwide.
The latest MyHome.ie report shows annual asking price inflation was 4% in Dublin and 3.9% outside the capital.
Housing stock was also at its lowest level since the COVID-19 pandemic.
The report said the rise in asking prices has been fuelled by the low volume of properties for sale and a buoyant labour market.
“The outcome for the full year was in marked contrast to the house price performance over the first six months when rising interest rates forced sellers to adjust valuations and reduce expectations for the prices they might receive,” the report said.
It found asking prices rose marginally by 0.2% on the quarter in Dublin but fell by 0.4% nationally and by 1.2% outside the capital.
This means the median asking price nationally was €325,000 in the fourth quarter of last year.
In Dublin it was €415,000 and elsewhere around the country it was €280,000.
In December, houses sold for an average of 4% over their asking price. At the start of the year that figure was just 1%.
“The shift is indicative of a more competitive market as demand outpaces supply,” the report found.
“By contrast just 1.4% of properties listed on MyHome cut their price in Q4 – the lowest proportion of price cuts for the final quarter of the year since MyHome.ie began collecting data in 2011.”
Bank of Ireland Chief Economist and report author, Conall MacCoille, said it has been a year of two halves.
“If asking prices were under pressure at the start of the year as the market adapted to a new interest rate environment, the picture at year end was very different,” he said
“Continuing supply issues meant that the market heated up again and by year end we saw once again that asking prices nationally were up over 4% over the year as a whole.
“Furthermore, we are seeing properties being sold for 4% over asking prices compared with 1% at the start of the year, indicating a more competitive market.”
‘Another rise is likely’
Mr MacCoille said the buoyant labour market means high interest rates have not had a negative impact on property prices.
“Revenue estimates that there has been a 50% rise since 2022 in the number of tax units, single or jointly assessed couples, with incomes exceeding €100,000,” he said.
“As for next year, our view is that the most likely outcome is another single-digit rise in house prices over the course of the year.
“There will again be competing pressures on prices coming from elevated rates of interest on the one hand and continuing supply shortages on the other.
“If anything, the rise may be sharper given the supply issues and the possibility – despite mixed signals from policymakers – of interest rate reductions happening at some point during the year,” he added.
There were just 11,600 properties for sale on MyHome at end 2023, down from 13,400 in Q3 – and well below the pre-pandemic figure of 20,000-plus.