A property survey from the Irish Auctioneers & Valuers Institute shows that price increases in many sectors of the market were beyond expectations last year.
'Demand for housing continues to outstrip supply, with double digit average inflation in all house sectors in 2005,' said CEO Alan Cooke. But he added that the average rate of increase for apartments was lower, ranging for the second-hand sector from 4.8% for one-bedroom unit in Connacht to 9.4% for a two-bedroom unit in Dublin.
The IAVI report said that a shortage in supply of large Dublin second-hand family homes was pushing prices up further. Three- and four- bedroom houses saw the highest average rate of increase, at over 13%.
Mr Cooke said that while average prices of second hand houses in Dublin increased by 11.3% to 13.5%, some areas of Dublin saw increases of up to 23.5%. He added that an increase in stamp duty exemption levels had also increased prices at the lower end of the market.
The IAVI said the residential rental sector saw a modest increase following several years of falling rents as Ireland's new immigrant population strengthened demand.
'Immigrants also played a role in the market for the sale of new homes and one Dublin agent reported that the sale of new homes to non nationals jumped from 5% two years ago to 30% last year,' Mr Cooke said.
The IAVI said housing development site values in Dublin and the rest of Leinster and Munster were up by more than 15%, adding that its members had reported a shortage of prime development sites in the Dublin area. 'Planning problems encountered by some developers, particularly in the Dublin area, are impacting by curtailing much needed supply,' it added.
