This quarter has shown the highest rise in house prices in Dublin since Q2 2017. There are two main reasons for this sharp price increase. Firstly, there are fewer homes available to buy at the present time, so supply is very low in both the new homes and secondhand sales markets. We estimate that there are approximately 30% fewer homes available for sale compared to a year ago. Secondly, demand at the present time is very strong, driven in the main by first-time buyers keen to move into homeownership. Buyers have been able to accumulate deposits at a quicker rate as their income has been more than enough to cover their reduced monthly outgoings during the lockdown, and as a result, the national savings rate has increased significantly in the last twelve months. Quite simply this means there are more people in a position to buy in the current market than there would otherwise have been.

In addition to the general supply/ demand imbalance, investors are now purchasing
a much larger proportion of the new and second-hand residential stock as they seek alternative opportunities. Negative bank interest rates and the prevailing uncertainty around the commercial property has pushed invertors towards residential property where returns continue to perform strongly. Data from DNG Research has found that a higher proportion of new homes units were sold to investors in Dublin in 2020 than in 2019.