The price of the average second-hand three-bed semi in Galway city has risen by 2.4% to €302,000 in the last three months, according to a national survey by Real Estate Alliance.

Prices in the county rose by 1.7% this quarter to €178,000, the Q3 REA Average House Price Index shows.

“Demand is extremely strong at all levels of the market and in particular at the higher end of the market, and supply is accounting for a large portion of the upswing in prices,” said Kevin Burke of REA McGreal Burke.

“This supply driven increase is due to continue as the lead in time for new developments and the increase in cost of construction are pushing the portion of the market which would usually take advantage of buying a new dwelling or building themselves on top of the traditional second-hand purchaser.”

Homes in the county are reaching sale agreed in four weeks across this quarter, and in the city, the average time on the market fell from four weeks to three.

“We achieved some excellent prices on sales properties in the city and suburbs over the summer,” said Alan McKenna of REA Halnon McKenna.

“The summer months are generally our quiet time with people on holidays, however this year we found ourselves listing and selling properties throughout the month of July and August.

“Lack of supply is the largest contributing factor for price increases and we expect that this will continue over the coming months.”

Average house prices nationally have risen by €3,500 per month since the end of June, with selling prices in commuter areas and small towns increasing by over double the growth experienced in the major cities.

The survey concentrates on the actual sale price of Ireland's typical stock home, the three-bed semi, giving an accurate picture of the second-hand property market in towns and cities countrywide.

The price of a three-bedroomed semi-detached house across the country rose by 4.1% over the past three months to €264,056 – representing an annual increase of 12%.

The biggest rises in Q3 came in commuter counties (4.6%) and the country’s large towns (4.9%) as buyers continue to move out further from the capital in anticipation of long-term remote and hybrid working situations.

They are being joined by a surge of interest from ex-pats, anxious to return to Ireland after the pandemic, with more set to return when family homes become available.

The rural and commuter area increases are double those being experienced in Ireland’s major cities, with Dublin increasing by 2.3% to €467,000 and Cork, Limerick and Galway by an average of 2.4% to €281,750.

“The survey’s average of four weeks to sell should be even lower because, while bidding is fast and furious, vendors are not rushing to accept offers,” said REA spokesperson, Barry McDonald.

“With an exceptional shortage of stock, demand is being fuelled by an increase in mortgage-approved buyers on the market.

“The rural flight, which began during lockdown, shows no signs of letting up, even in the face of a return to office working.”