“A moderation in house prices masks a further deterioration in stock”
Statement by Marian Finnegan, Managing Director, Sherry FitzGerald.
September 28th, 2023
Sherry FitzGerald, Ireland’s largest estate agent, reported today (Thursday, September 28th, 2023) that the average value of second-hand homes in Ireland increased by 1.2%[i] in the third quarter of the year, with values rising 3.2% in the first nine months of the year. This compares to growth of 5.5% in the same time period last year.
In Dublin, there was a further rise of 0.5% in the quarter, bringing cumulative price growth in the year to the end of September to 1.8%. This is significantly lower than the growth of 5.2% recorded during the same time period in 2022.
Price growth continues to be stronger outside of Dublin, in regional and rural Ireland where the stock available for sale is significantly tighter. In the third quarter of this year, values rose 1.1%, bringing cumulative growth in the year to date to 4.1%.
According to Marian Finnegan, Managing Director, Sherry FitzGerald; “There is now clear evidence of a moderation in price inflation throughout the market, following 14 months of persistent interest rate increases. However, the disparity between supply and demand for housing, continues to underpin the market. The depth of this disparity is evident in our latest bi-annual analysis of supply which shows that the stock of available housing to purchase has fallen to an historic low across the country.”
This latest research reveals that the number of second-hand properties listed for sale across the country in July 2023 was a mere 13,750. This figure represents only 0.7% of the entire private housing stock in Ireland and means that the stock of properties available for sale has fallen by a significant 10.2% since July 2022. Moreover, when contrasted with summer 2020, a time marked by the COVID-19 pandemic, the decrease is even more pronounced at 24%. Rural areas are disproportionately impacted, with counties like Carlow, Donegal, Mayo, and Westmeath all experiencing stock decreases exceeding 40% within a three-year span.
Additionally, recently released data from the CSO suggests that the population of Ireland has increased by over 97,000 in the year to the end of April 2023. The buoyancy of the labour market and the overall strength of the economy continues to attract people to Ireland to work, while the ongoing war in Ukraine has also contributed to inward migration. This population surge only further highlights the need for increased housing delivery. Estimations by Sherry FitzGerald suggest that we need to build approximately 52,000 units per annum for the next ten years to satisfy demand in the market.
The rental crisis continues to be one of the key challenges for the Irish housing market. As has been the case for over a decade, vendor statistics once again highlight the disparity between investors entering and exiting the market.
In the year to date, just 11% of purchasers of second-hand homes with Sherry FitzGerald were investors, whereas 35% of sales were investors selling their properties. Extrapolating this data outwards, we estimate that there has been a net loss of over 9,000 tenancies in the nine months to the end of September.
With Budget 2024 fast approaching, now is the time for the Government to address the systematic problems in the rental sector. For much of the past decade, for every investor buying into the market, three have exited. An extension of the tax credit for renters would be welcomed, but the Government must commit to addressing the crux of the issue in the rental market, a lack of supply.
According to Marian Finnegan, Managing Director, Sherry FitzGerald; “Transaction activity has remained stable in the first half of the year with over 26,800 sales recorded on the property price register (PPR), excluding block sales and new homes acquired for social housing. This represented a modest increase of 2.1% increase on the levels of a year ago. That said, the shortage of available properties could result in a contraction in activity in the latter months of the year.”
In the second-hand market, activity remained steady, with approximately 22,450 units sold, much in line with H1 2022 figures. New home sales continue to grow, with recording 4,350 units transacting in the first six months of the year, an additional 400 units when compared to the same time last year.
In conclusion, Marian Finnegan said “There are a myriad of somewhat conflicting trends evident in the market today, however the underlying one remains that despite unprecedented Government supports and the best endeavours of the industry the housing crisis is showing little signs of abating. We therefore need a doubling of the efforts of all stakeholders to work together to address what is in truth an emergency in the housing market, and nowhere is this more evident today than in the rental market.”
-ENDS -
For any further information, please contact:
Jill O’Neill Marian Finnegan
PR Director Managing Director, Residential & Advisory
Sherry FitzGerald Group Sherry FitzGerald Group
Ph: 01 2376 500 / 086 252 3277 Ph: 01 237 6341 / 086 814 8251
[i] The Sherry FitzGerald house price index model reflects achieved prices which results in a differential when compared to other industry commentators using data sources such as vendor expectations, asking prices, average values etc.
