Homes being sold for 10% more than asking prices
Bank of Ireland said new analysis shows that competition for homes intensified during the summer with almost 40% of transactions now being settled at a minimum 10% premium over the original asking price.
The bank noted that the average mortgage approval for house purchase was €318,300 in July, up 6.2%. Bank of Ireland said this pointed to further house price gains, driven by rising wages and household incomes.
It said it still expects a further substantial rise in house prices of 4% in 2025.
In its latest economic outlook report, Bank of Ireland revised down its forecast for Irish GDP growth to a 1% contraction for this year, while modified domestic demand is set to rise by 2.3%.
The bank said this was mainly due to statistical distortions and volatile data.
It noted that the economy has expanded rapidly again this year and it upgraded its forecast for employment growth to 2.4%.
“Beneath the statistical fog, the export sector is performing well and should contribute positively to 3.5% GDP growth in 2025,” Bank of Ireland said.
The lender also noted that pay growth is running at 4%-5% – exceeding inflation – which is helping households and should drive 3% growth in consumer spending next year.
The €8 billion Budget 2025 package and 6.9% public spending growth, should support domestic demand next year, it added.
Conall Mac Coille, group chief economist at Bank of Ireland, said the bank has again revised down its forecasts for GDP growth but this is largely due to statistical distortions related to the multinational sector and contract manufacturing – goods produced in other countries but where the associated profits are counted in Irish GDP.
“A number of economic indicators on the performance of the indigenous economy point to strong growth,” the economist added.
He said that current buoyant rates of employment and population growth are not sustainable in the longer-term, adding that this is evident in pressures on housing, infrastructure and public services.
“Ireland’s rates of pay growth (5.6%) and house price inflation (9.6%), are now starting to stand out from other euro area countries, posing a risk to competitiveness, House prices are now at their most expensive level relative to the euro area, since 2009,” he said.
“In this context, Budget 2025 should be finely balanced between delivering infrastructure in a timely and cost effective fashion, whilst avoiding measures that risk overheating the economy,” he added.
Article Source – Homes being sold for 10% more than asking prices – Bank of Ireland – RTE
