House prices have risen by 10.6% in the last year, according to new Central Statistics Office (CSO) figures.

However, Property Industry Ireland (PPI) believes this is a direct result of an under supply in the housing market.

PII Director Dr Peter Stafford said: "The volume of housing transactions has increased by 31% in the period from January to May this year, compared to the same period last year. However, the number of new houses being built hasn't changed in the last four years. It is likely that, as in previous years, around 8,500 new properties will be built this year, far below our annual need of 25,000. Until measures are put in place to improve the supply of new properties in areas where they are needed, prices will continue to rise.

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"The gap between supply and demand has both social and economic consequences. Rising prices undermine affordability and erode hard-won competitive gains. PII looks forward to both administrative and cost blockages in the planning system being addressed, as they are slowing down the supply of otherwise viable, quality developments."

Mr Stafford said it makes no sense for official house price data to exclude 40% of transactions because they are non mortgage purchases.

(CD)