'Demand is fierce': Homes being sold for 20% over asking price amid 'intense competition'
Report also notes the number of homes built in 2024 will likely be about the 33,000 mark, which is well short of the 'almost 40,000' that had been touted by the Government.
Almost 15% of homes are being sold for 20% over the asking price, as buyers face “intense competition” in an exceptionally tight market to secure a property of their own.
The latest quarterly house price report for MyHome.ie, released on Thursday morning, says rising levels of homeowner debt along with falling interest rates are set to continue driving bidding wars in the market and put more upward pressure on house prices this year.
It says the average mortgage property loan in Ireland exceeded €300,000 for the first time last year, rising 7% to €308,200, while first-time buyers here are getting older, now aged 36 on average.
While the report forecasts a 4% rise in house prices in 2025, it admits such an estimate may be “conservative”.
“The message from this report is that pricing has retained its momentum, and has still not softened even as affordability has become stretched through 2024,” said Bank of Ireland chief economist Conall MacCoille.
The MyHome report, in association with Bank of Ireland, says the Irish housing market is “clearly exceptionally tight”, with the average time to sale agreed standing at just three months in the fourth quarter of 2024, which it calls an “historic low”.
It says whatever stock is available for sale on estate agents’ books is being sold on ever more quickly.
Nationally, it says asking prices are up 8.4% year-on-year as, on average, homes are being sold for about 9% more than their asking price, with 40% going for at least 10% over asking.
The median asking prices rose significantly in the last year in cities such as Cork (up 12% to €325,000), Limerick (up 11% to 270,000), and Galway (up 18.6% to €350,000), according to the report.
Mr MacCoille said close to half of first-time buyers had mortgage loans with a loan-to-income ratio just below four times their income. This compared to the situation prior to the relaxation of the Central Bank rules, where close to 60% of first-time buyers had a mortgage loan just below the previous 3.5 times their income threshold.
“This is the first time since the Celtic Tiger years that the first-time buyer ratio is greater than the UK,” he said.
He did, however, suggest there are modest signs of improvement from a buyer's perspective, with an increase in new homes listed in the fourth quarter of 2024 with a key “acid test” to come in the spring when the market tends to accelerate.
The economist said further ECB rate cuts would also support house prices but, with limited homes for sale, any initial improvement in affordability “may be diluted by homebuyers bidding up house prices”.
The report also notes the number of homes built in 2024 will likely be about the 33,000 mark, which is well short of the “almost 40,000” that had been touted by the Government prior to the election.
Mr MacCoille added: “Looking ahead to the rest of the year, the outlook is extremely uncertain. For now, we are sticking with our forecast for 42,000 housing completions next year, rising to 45,000 in 2026.
The findings from MyHome follow previous commentary from Daft.ie and estate agents DNG, which also estimate significant inflation in house prices again in 2025.
Last Thursday, Daft.ie's report suggested the rate of price increase for a home in Ireland hit its highest level for nearly a decade in 2024.
And this week, DNG said it expected house prices around the country to rise by up to 8% this year, with supply “by no means” at the level needed to meet demand in the market.
