One in seven Irish homes is now selling for 20% over the asking price, according to MyHome.ie.

In its latest report, the property website warns that asking prices are now rising at their fastest rate in two years.

According to the figures, national asking prices are up 7.5% on this time last year.

In Dublin, they are up 6.2%, while outside the capital they are rising even faster at 8.5%.

The median asking price around the country is now €365,000, while the median in Dublin is €455,000.

Ireland asking prices. Image: MyHome.ie

The report notes that Ireland’s exceptional population and labour market growth has put intense pressure on Ireland’s chronically undersupplied housing market.

It warns that Ireland would need an extra 206,000 homes to match the UK’s housing to population ratio.

Report author Conall MacCoille said Ireland’s population grew by 1.9% last year for the second year in a row.

“We have not seen population and economic growth at this level since the Celtic tiger era, and as a result, the housing market is being put under intense pressure,” he said.

“A simple way to illustrate this is to ask how many homes Ireland would need to build to match the UK’s housing to population ratio.

“Our report shows that to ‘catch up’ with the UK’s housing stock would now require an additional 206,000 homes.”

Supply

He noted that the number of homes Ireland would need to catch the UK has increased by 68,000 in the last four years.

He said price inflation looks set to peak in the coming months before finishing the year at around 7.75%

Looking ahead to 2025, Mr MacCoille said another mid-single digit price gain looks likely.

Construction

He noted that new instructions for sale were up 2% in Q3 but “remain depressed”.

“The overarching concern is that the tight housing market is now feeding on itself, with would-be vendors put off for fear of failing to secure a property once they sell their own home,” he said.

Mr MacCoille said it is “promising” to see housing starts rise to 49,000 in the year to July but warned that it remains hard to tell how many of these will translate into completion due to the “rush of activity prior to the expected expiry of waivers on local authority development levies”.