No bubble, not enough houses has now produced the third report in a week showing a strong rise in the capital city.

It comes after a number of reports have now shown prices surging ahead in the capital, but falling the rest of the country.

In the three months to September, Daft said asking prices for properties were up 7.7pc compared with the same period last year.

The average national asking price is down 1.5pc from the same time last year, and now stands at €170,400

This is a fall of 55pc from the peak.

Last week the Central Statistics Office said prices had surged by 10.6pc in the greater Dublin area, but fell when compared with a year ago outside the capital.

But’s Ronan Lyons said this did not signal a bubble was developing.

Mr Lyons, who is also assistant professor of economics at Trinity College, said that such concerns were overstated.

“Ultimately bubbles can only emerge with loose credit, and there are few who would argue that the housing market in Dublin is cursed with easy money.”

Mr Lyons said the sharp rise in Dublin prices was due to a lack of properties, not easy credit. He said there was a need for at least 10,000 new homes to be built in the capital alone.

“Not only has Dublin almost no backlog from the bubble years, it is also building next to no new homes. A city of almost half a million households is building only slightly more than 1,000 units a year.

“This is probably one-tenth of the number it needs.”

Building new homes would stop prices rising to unaffordable levels, Mr Lyons said.

Earlier this week said prices were stabilising in cities beyond Dublin and falling in rural areas. said this was the third quarter in a row that Dublin asking prices had registered year-on-year increases. Source: Irish Independent.