PROPERTY prices soared in July as the housing crisis worsens.
he scarcity of homes to buy saw prices rise 8.6% in the year through July, according to figures from the Central Statistics Office.
This is a three-year high, with economists suggesting there is now panic buying in the market.
Prices in Dublin rose 8.1% and prices outside Dublin rose 9.1% as the market got out of hand.
The price spike in July was the fastest rate of increase in more than two years.
For the month of July, prices increased by 1.7 pc, the largest increase in four years.
Economists have warned that extreme price hikes are expected for some time until higher output from new housing starts catches up with demand.
The higher rate of price increases means that more potential first-time buyers are excluded from the market, forcing them to pay exorbitant rents.
CSO statistician Viacheslav Voronovich said price growth has been subdued for most of last year, but an accelerating trend in growth has emerged in the latter part of the year and this year.
The tendency for people to move to rural areas to work from home has pushed up prices in border counties by 16% in the past year.
At the other end of the scale, the Southwest saw an increase of 5.3 pc.
KBC Bank economist Austin Hughes said affordability constraints and working from home are increasing particularly rapidly in areas of the country where real estate is relatively cheap.
Overall, prices have now doubled from the low point reached in early 2013 and are now only 11% below the highest level reached in 2007.
Residential property prices in Dublin are 16.5% below their February 2007 high, while residential property prices in the rest of Ireland are 13% below their May 2007 high .
Mr. Hughes said price pressures continue to increase dramatically.
“Although the supply remains limited, it has not worsened in recent months. “So these numbers suggest that demand from home buyers continues to accelerate.”
He said this partly reflected the improvement in the economy and the easing of health-related restrictions.
It probably also suggests that buyers believe prices will continue to rise, Mr Hughes said.
“So there may be an element of panic buying creeping into the market. This highlights the need to build confidence. Supply will have increased significantly in order to calm demand.
Mr Hughes said the figures suggest that translating the government’s housing for all strategy into physical properties is becoming even more urgent.
The hot real estate market has seen a 50% increase in the number of homes purchased by consumers. Some 3,822 household purchases of homes at market prices were filed with Revenue in July.
The restrictions last year have kept people from buying homes.
Mr Voronovich said: “Since the end of 2020, the number of homes purchased by households has returned to pre-Covid-19 levels.
“In the first seven months of 2021, there were 24,280 homes purchased by households at market prices. This compares to 24,416 for the first seven months before the 2019 pandemic. “
The median price of a house was € 267,000, the CSO said.
In the year to July, the lowest median price for a house was € 120,000 in Longford, while the highest median price was € 560,000 in Dún Laoghaire-Rathdown.
Nationally, the prices of used homes are rising faster than those of new construction.
New home prices rose 2.2% in the three months to June. This compares to an increase of over 6.7% in the prices of existing homes over the same period.