PROPERTY prices have rocketed upwards in July as the housing crisis worsens.
he scarcity of homes to buy has seen prices increase by 8.6pc in the year to July, figures from the Central Statistics Office show.
This is a three-year high, with economists suggesting there is now panic buying in the market.
Dublin prices were up by 8.1pc, and prices outside Dublin rose by 9.1pc, as the market rages out of control.
The surge in prices in July represents the fastest pace of annual rises in more than three years.
For just the month of July, prices were up by 1.7pc, the biggest increase in four years.
Economists warned that extreme price rises were in store for a while yet until higher output of new housing starts to catch up with demand.
The higher pace of price rises means more potential first-time buyers are locked out of the market, forcing them to pay sky-high rents.
CSO statistician Viacheslav Voronovich said price growth was subdued throughout most of last year, but a trend of accelerating growth emerged in the latter part of the year and into this year.
The trend of people relocating to rural areas to work from home has seen prices in the Border counties shoot up by 16pc in the past year.
At the other end of the scale, the South West saw a 5.3pc rise.
Economist with KBC Bank Austin Hughes said affordability strains and working from home are seeing particularly fast increases in areas of the country where property was comparatively cheap.
Prices overall have now doubled from the low point reached in early 2013, and now just 11pc lower than the highest level they reached in 2007.
Dublin residential property prices are 16.5pc lower than their February 2007 peak, while residential property prices in the Rest of Ireland are 13pc lower than their May 2007 peak.
Mr Hughes said price pressures continue to increase markedly.
“While supply remains curtailed, it hasn’t worsened in recent months. “So, these figures suggest home-buyer demand continues to pick up.”
He said this partly reflects the improving economy and the easing in health related restrictions.
It likely also suggests buyers believe prices will continue to increase, Mr Hughes said.
“So, there may be some element of panic buying creeping into the market. This highlights the need to build confidence. Supply will have increase markedly in order to calm demand.”
Mr Hughes said the figures suggest translating the Government Housing For All strategy into physical properties is becoming even more urgent.
The red hot property market has seen a 50pc increase in the number of homes bought by consumers. Some 3,822 dwelling purchases by households at market prices were filed with Revenue in July.
Restrictions last year meant people were unable to buy homes.
Mr Voronovich said: “Since the latter part of 2020, the number of dwellings purchased by households have returned to pre-Covid-19 levels.
“In the first seven months of 2021, there were 24,280 dwellings purchased by households at market prices. This compares to 24,416 for the first seven months of pre-pandemic 2019.”
The median price of home 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.
Nationwide, prices for second-hand homes are rising faster than those for new builds.
New home prices were up by 2.2pc in the three months to June. This compares with a rise over 6.7pc in prices for existing homes in the same period.