House prices in western counties increased at twice the rate of the east coast last year as buyers battle over the lowest supply on record, the Q4 REA Average House Price Index has found.

The absence of new home building, and historically low supply has seen three bed semi-detached homes in counties Clare, Donegal, Galway, Limerick, Mayo, Roscommon and Sligo increase by over €10,000 in the past 12 weeks – with an average annual rise of 16pc.

This is twice the rate of increase in commuter counties, which rose by 7.5pc over 2024.

The REA Average House Price Index concentrates on the 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 actual selling price of a three-bed, semi-detached house across the country rose by 2.1pc in the past three months to €330,602, and 9pc overall annually.

But west of the Shannon, counties such as Mayo (25pc) and Clare (21pc) have witnessed unheralded annual price inflation due to multiple buyers bidding on scarce properties.

REA agents nationwide are predicting a 6pc rise in house prices in 2025, but spokesperson Seamus Carthy has predicted an increase in bidding wars as buyers chase an extremely limited stock of second-hand three-bed semis.

“There are simply very few options for people, especially in areas where new homes are not being built – it’s as if someone drew a line down the centre of the country,” said Mr Carthy.

“We have seen buyers bidding on ten different properties, and after being frustrated on them all, have decided to hold off until the new year.

“Many will come back rejuvenated but, finding limited supply in the market, they will want to close off immediately.

“This will trigger the sort of bidding wars that we have been seeing recently, where prices of €50,000 over asking price are not uncommon, due to lack of supply.”

Actual selling prices in Dublin city rose by 1.8pc in the last three months, and the average three-bed semi in the capital is now selling at €542,000.

Prices in the major cities outside the capital rose by an average of 2pc to €348,000 in the last three months – an annual rate of increase of 7.7pc, with agents predicting a further 9pc rise in 2025.

Galway city three-bed semis increased by €10,000 for the second quarter in a row to an average of €370,000, reflecting an annual rise of 10pc, with the outlook remaining similar for next year according to local agents REA McGreal Burke.

The cities of Cork (€390,000), Limerick (€320,000) and Waterford (€312,000) saw quarterly rises of 1.3pc, 1.6pc and 2.3pc respectively.

And excess demand is now causing price inflation in county towns surrounding our major cities.

Galway’s scare supply has also caused an annual rise of 17pc in the county, where the average price is now €270,000 – an increase of €10,000 in the past quarter.

A similar rise in price has seen Limerick County semis increase by 4pc to €260,000 in the past three months.

Homes in the country’s large towns continue to show the biggest growth nationwide, up 11.5pc on last September and 2.6pc this quarter to an average of €249,448.

The largest yearly rise was in Mayo where three-bed semis surged by 25pc to €240,000, an increase of €48,000 since the Q1 survey in March.

The biggest quarterly increase came in Clare where three-bed semis surged by €20,000 to €290,000, an annual rise of 21pc.

Agents REA Paddy Browne have pointed to a severe lack of supply of second hand properties and new homes which will continue to influence the market into 2025.

Homes in commuter counties rose by 2pc over the past three months to an average of €343,778, an annual rise of 7.5pc.