A report has shown that asking prices for homes rose at the fastest pace for three years in 2020, confounding warnings that COVID-19 disruption would lead to a slump.

MyHome.ie’s figures for the final quarter of 2020, produced with stockbroker Davy, show that asking prices rose at an annual rate of 6.3% in the three-month period. The increase in Dublin was 4.8%, with faster growth of 7.2% outside the capital.

The mix-adjusted asking price for new sales nationally, which MyHome.ie believes is a more reliable indicator of future trends, was €284,000 — €392,000 in Dublin and €238,000 elsewhere.

Rises to continue in 2021

The report’s author, Davy chief economist Conall Mac Coille, said that house price increases were now likely in 2021.

He said the pressure on prices seen in his report had not yet turned up in transaction prices, adding that was probably only a matter of time before the Central Statistics Office’s official measure of house price inflation accelerated.

“As we head into 2021, homebuyers have saved additional funds to purchase homes, with sentiment helped by the likely recovery in the economy as vaccines are disbursed,” the economist said.

“Given that homebuilding will remain impaired, with banks seeking lending opportunities, too much cash is chasing too few homes – which can only push prices higher,” he added.

Market mirrors economy

MyHome.ie’s managing director Angela Keegan said the property market mirrors the overall economy, which was in a much better place now than was expected earlier in the year when the virus emerged.

She said Government supports, increased mortgage lending, and the concentration of job losses among mostly lower-paid workers had boosted the property market.