€18.5bn was spent on residential property transactions last year despite the Covid-19 pandemic, new preliminary figures from the Property Services Regulatory Authority (PRSA) show.

The spend represents a 14% increase on the €6.2bn that was paid out for homes, apartments and other places to live in 2020.

The figures from the PRSA are provisional though, and Davy estimates the final out-turn will be closer to €19bn.

"Nonetheless, activity was clearly well up on the €16.2bn of transactions recorded in 2020 and will likely exceed the €18.7bn in 2019," said Conall MacCoille, Davy chief economist.

However, he also said that inflationary pressure was clear in the average transaction prices.

The average transaction last year was €342,000 up from €329,000 a year earlier and €317,000 in 2019.

Mr MacCoille estimates transaction volumes returned to 2019 levels last year, increasing by nearly a quarter on those recorded in 2020.

"Activity was clearly hurt during the middle of the year by the third lockdown, with vendors slow to return to the market," he wrote in a note to investors.

"Transaction volumes should exceed pre-pandemic 2019 levels in 2022."

Davy predicts that the tight housing market is likely to continue through this year, with only small signs of a pick-up in new listings for sale at the back end of last year.